1999 ANNUAL REPORT IT’S OUR PEOPLE CUSTOMERS REMEMBER THE MOST

Brought to you by Global Reports CONTENTS Chairman’s Report ...... 3 Chief Executive’s Report ...... 4 Unbroken Record of Profit Improvement ...... 6 Growing the Network ...... 8 Fleet for the Future ...... 10 More Options through Alliances ...... 12 ’s Best Food, Wine and Service ...... 14 Technology into the Next Millennium ...... 16 Part of the Community ...... 18 Board of Directors ...... 22 Senior Management ...... 25 Corporate Governance ...... 26 Performance Summary ...... 28 Concise Report ...... 29 Five Year Summary ...... 46 Shareholder Information ...... 48 Directory ...... IBC

REGISTERED OFFICE FINANCIAL CALENDAR Airways Limited 1999 ACN 009 661 901 30 June Year end Qantas Centre 19 August Preliminary final result announcement Level 9 Building A 3 November Record date for final dividend 203 Coward Street 17 November Annual General Meeting, Adelaide Mascot NSW 2020 1 December Final dividend payable Australia 31 December Half year end

Telephone 61 2 9691 3636 2000 Facsimile 61 2 9691 3339 17 February Half year result announcement 1 March Record date for interim dividend Internet Address 29 March Interim dividend payable http://www.qantas.com.au 30 June Year end 17 August Preliminary final result announcement 1 November Record date for final dividend 16 November Annual General Meeting, 29 November Final dividend payable

NOTICE OF MEETING The 1999 Annual General Meeting of Qantas Airways Limited will be held at 2:00pm on Wednesday 17 November 1999 in the Regency Ballroom at the Hyatt Regency Adelaide, North Terrace, Adelaide.

COVER: Michelle Maude, Licensed Aircraft Maintenance All amounts are expressed in Australian dollars Engineer, Line Maintenance, Sydney. unless otherwise stated.

Brought to you by Global Reports FEATURES PAGE 6 UNBROKEN RECORD OF PROFIT IMPROVEMENT Qantas earned a net profit before tax of $662.5 million for the year ended 30 June 1999, an increase of 38.6 percent over 1997/98. Net profit after tax of $420.9 million increased by 38 percent.

8 GROWING THE NETWORK The development of markets with strong commercial potential in the USA and Europe, judicious entry into emerging markets and strengthened capacity at home have been the pillars of profitability in the last financial year.

10 FLEET FOR THE FUTURE Qantas continued its disciplined approach to aircraft acquisition in 1998/99 with the focus on the efficient use of existing aircraft, as well as commencing a program to upgrade the Rolls-Royce engines on its 747-400 fleet.

12 MORE OPTIONS THROUGH ALLIANCES Major alliance developments – including the implementation of oneworld and the expansion of other airline partnerships – have given Qantas customers more options than ever in terms of schedules and destinations and increased frequent flyer opportunities.

14 AUSTRALIA’S BEST FOOD, WINE AND SERVICE Qantas has extended its restaurant-style cuisine from First to Business Class and introduced a new range of premium Australian wines, while continuing its program of investment in domestic terminals.

16 TECHNOLOGY INTO THE NEXT MILLENNIUM Qantas is spending some $112 million to ensure its readiness for the Year 2000. The airline is also investing in sophisticated telecommunications and has introduced a range of electronic initiatives to improve customer access to bookings, travel information and tracking freight.

QANTAS 1999 ANNUAL REPORT 1

Brought to you by Global Reports Qantas, the oldest airline in the English-speaking world, was founded in the Queensland outback in 1920. Qantas is recognised as one of the world’s leading long distance airlines, having pioneered services from Australia to North America and Europe. The Qantas Group carried more than 19 million passengers in 1998/99, operating a fleet of 135 aircraft across a network spanning more than 100 destinations in Australia, Africa, the Americas, Asia, the United Kingdom, Europe and the Pacific. Qantas employs almost 30,000 full and part-time staff of more than 100 nationalities, in more than 30 countries and speaking more than 50 different languages.

2 QANTAS 1999 ANNUAL REPORT

Brought to you by Global Reports CHAIRMAN’S REPORT

ANOTHER RECORD RESULT Qantas reported a net profit before tax of $662.5 million for the year ended 30 June 1999, an increase of 38.6 percent over the prior financial year.

The half year result to 31 December the investment includes aircraft On behalf of the Qantas Board, I would 1998 was, in financial terms, the best refurbishments, lounge and terminal like to thank management and staff to date. The second half added to improvements and customer service for their commitment and congratulate that outcome and enabled Qantas to programs. This has enabled Qantas to them on their contribution to the continue its unbroken record of profit achieve its highest ever ratings in regular outstanding trading results for the improvement since listing on the internal surveys of customer service and 1998/99 financial year. Australian Stock Exchange in 1995. brand recognition. The full year result delivers significant The product investment program and value to shareholders through the record previously announced expansion of the earnings, the higher final ordinary fleet will generate increased depreciation dividend and, notably, the special and funding charges against profits in dividend. It was achieved in a market the 1999/2000 year and beyond. These GARY PEMBERTON, AC Chairman which continued to be strongly will need to be offset by higher revenues competitive and under a difficult or continuing efficiency gains. aviation policy environment. Going forward, management will not During the year, Qantas continued its change the strategies that have served extensive program of investment in Qantas well and will continue to manage product and service. Spanning three carefully the asset base and maintain years and totalling over $700 million, emphasis on productivity and efficiency.

QANTAS 1999 ANNUAL REPORT 3

Brought to you by Global Reports CHIEF EXECUTIVE’S REPORT

Qantas has been able to achieve sustained improvement in profitability over the last five years since its public float, in a challenging period which has included a collapse in the previously lucrative Japan market and subsequently the widespread, severe downturn in Asian markets. SUCCESSFUL COMMERCIAL STRATEGIES Kilometres (RPKs) increased by 1.5 continuity and contingency planning. Qantas commercial strategies have percent on stable capacity resulting in We invested also in a total Network been a major contributor to its financial an improvement in load factors of Redesign Program during the year which performance. These include investment 1.5 percentage points. will create one of the world’s most in new yield management systems, tight Domestic operations contributed advanced telephone, computer, Internet management of route profitability and $256.8 million in EBIT, an increase of and intranet networks, connecting all aircraft allocation, and substantial new 20.3 percent over the previous year operational sites around the world and expenditure to ensure high standards reflecting the robustness of the domestic providing for a major presence on the in products and services. Aggressive economy. Load factors and yields were World Wide Web. marketing and advertising have further maintained with capacity growth of AIRCRAFT AND SERVICES strengthened the Qantas brand and 3.8 percent. During the year, Qantas purchased reputation. Scheduling decisions have Subsidiary operations contributed two new -300s from the assisted in lifting operating efficiencies. $136.7 million to the Group’s EBIT, an manufacturer and two -400s Both current and future strategies increase of 41.8 percent on the prior from Malaysia Airlines. In addition, acknowledge the importance of revenue year. Subsidiary and other operations Qantas has firm orders for three Boeing as well as cost control. were a substantial part of the Group’s 747-400s and one Boeing 767-300 CONTRIBUTIONS TO PROFITS profit performance with all businesses scheduled for delivery in 1999 and 2000. International operations contributed including Catering, Qantas Holidays, This additional capacity will be deployed $308.3 million in Earnings Before Freight and Regional Airlines providing as part of announced schedule changes Interest and Tax (EBIT), up 13.4 percent. substantial returns. including additional services to London, Excluding the effects of movements in South Africa and Auckland, new services INFORMATION TECHNOLOGY foreign exchange rates, international to New York from Sydney and the first Qantas is on track with a comprehensive passenger revenues declined 1.4 percent non-stop services between program to achieve readiness for the and yield was down by 2.8 percent over and Los Angeles. Year 2000 including detailed business the prior year. Revenue Passenger

4 QANTAS 1999 ANNUAL REPORT

Brought to you by Global Reports “We are carefully building a greater sense of partnership and trust by being committed to an open, inclusive style of working together.”

By the end of 1999, all major long Among the most satisfying aspects of the haul international routes will be huge changes which have occurred serviced by Boeing 747-400 aircraft in throughout Qantas in recent years are the new three-class configuration. the improved levels of understanding by Reconfiguration of the Boeing 767-300 our people of our business and the fleet is targeted for completion by the continuing competitive pressures we face. middle of next year. There is also a wide acknowledgement of Qantas extended its new restaurant style the critical role of profits and satisfactory inflight cuisine from First Class into returns to shareholders for the future of Business Class cabins in its international the business. aircraft during the year. This has in turn led to a growing willingness of staff to take responsibility COSTS Further extensive efficiency and and ownership of dramatic improvement productivity programs and lower fuel programs. We are carefully building a prices helped to improve margins. greater sense of partnership and trust by These gains were offset to some degree being committed to an open, inclusive by higher information technology and style of working together. capacity related costs. As much as any aspect of improvement achieved in recent years, this inspires OUR PEOPLE confidence in our ability to manage The Board approved a further grant of change and build a sustainable future $1,000 worth of bonus shares to each for the business and its people, who eligible staff member under the Qantas display high levels of pride, loyalty Profitshare Scheme in recognition of and commitment. their role in achieving outstanding financial results. The total value of this grant is approximately $28 million.

JAMES STRONG Chief Executive

QANTAS 1999 ANNUAL REPORT 5

Brought to you by Global Reports Operating Profit Before Tax Gearing (adjusted for and Abnormals ($m) operating leases) (%) 700 80

600

60 500

400 40 300

200 Glen Doherty, Airline Services Operator, 20 Ayers Rock Airport. “I work here with a 100 group of exceptional people – all, I believe, 0 0 drawn together by the power and tranquillity of Uluru. 1999 1999 1998 1998 1995 1997 1995 1997 1994 1996 1994 1996 We’re pretty multi-skilled – probably because of the size of the port and its geographic location. On any given day, my duties may include loading and unloading aircraft, cleaning, catering, bringing in the aircraft, baggage services, helping with group check-in and guiding passengers. Seeing the anticipation on the faces of people arriving, and the satisfaction of the people leaving, brings home to me why I’ve chosen to live here, in what is perhaps the most peaceful spot on earth.” UNBROKEN RECORD OF

Qantas earned a net profit before tax of $662.5 million for the year ended 30 June 1999, an increase of 38.6 percent over 1997/98. Net profit after tax of $420.9 million increased by 38 percent and included an abnormal after tax gain of $38.9 million relating to the sale of part of the investment in the international data network company, EQUANT NV.

INCREASED REVENUE The continued success of efficiency and Whilst revenue declined by 1.4 percent Sales and operating revenue of productivity programs along with lower and yield dropped 2.8 percent, Revenue $8.45 billion reflected growth of more fuel prices – although offset to some Passenger Kilometres (RPKs) increased than $300 million or 3.9 percent over the degree by higher information technology by 1.5 percent. This resulted in an prior year. The growth in revenue and capacity related costs – contributed improvement in load factors of included a 4.0 percent increase in net to an improvement in margins. The 1.5 percentage points on stable capacity. passenger revenue and overall passenger operating margin at the Earnings Before International operations were also yield improvement of 1.8 percent. Interest and Tax (EBIT) level improved by favourably impacted by movements Excluding the favourable impact of 20.6 percent. in foreign exchange rates. movements in foreign exchange rates, During the year, $480 million in benefits Domestic operations contributed yield declined by 0.9 percent. were achieved through a combination $256.8 million in EBIT, up 20.3 percent. The result for 1998/99 reflected solid of new efficiency, productivity and Load factors and yields remained steady, revenue performance in a market which non-passenger revenue enhancement whilst capacity grew by 3.8 percent. continued to be highly competitive and initiatives. Subsidiary operations contributed under a difficult aviation policy As a result, and excluding the $136.7 million in EBIT, an increased environment. unfavourable impact of movements in contribution of 41.8 percent compared EXPENDITURE AND COST SAVINGS exchange rates, cost per Available Seat to the prior year. Subsidiary and other Operating expenditure for the 1998/99 Kilometre (ASK) improved by 0.6 percent operations, including Catering, Qantas financial year was $7.75 billion, an in comparison to the prior year. Holidays, Freight and Regional Airlines, increase of only 2.6 percent over the INCREASED CONTRIBUTION provided substantial returns and were a prior year. Excluding the adverse impact International operations contributed significant part of the Qantas Group’s of exchange movements, costs were $308.3 million in EBIT, an increase of profit performance. stable compared to last year. 13.4 percent compared to the prior year.

6 QANTAS 1999 ANNUAL REPORT

Brought to you by Global Reports Glen Doherty at Uluru – Kata Tjuta National Park. A World Heritage Living Cultural Landscape PROFIT IMPROVEMENT

ROUTE PROFITABILITY for four additional aircraft, one Boeing COMMITMENT TO SHAREHOLDER Internationally, services to the USA and 767-300 and three Boeing 747-400s, RETURNS the UK provided the best returns. Results which are due for delivery in 1999 and Qantas is committed to the consistent from Asia were better than the prior year. 2000. The increased capacity provided by delivery of attractive returns to shareholders. On domestic services, the East Coast these eight aircraft will be utilised as part trunk routes were the most profitable of announced schedule changes, which The Directors declared a fully franked followed by the East West routes. include new and additional services. final dividend of 24.5 cents per share, All domestic route groups recorded In June 1999, Qantas issued 17.5 cents higher than the fully franked improved performance compared to the US$350 million of unsecured notes final dividend for last year. The dividend previous year except for services to the with a 10-year maturity. This borrowing included two components, a final Queensland Coast which were impacted will be used to fund committed aircraft ordinary dividend of 11 cents per share by falling yields. acquisitions and retire debt. As proceeds and a special dividend of 13.5 cents per share. CASH FLOWS from the note issue were not used at 30 June 1999, the debt to debt plus Cash flows from operations again This brought total fully franked dividends equity ratio (including non-cancellable totalled $1.2 billion. Capital expenditure for the year to 32.5 cents per share, operating leases and on a hedged basis) also amounted to approximately 19 cents per share higher than last year. improved by one percentage point to $1.2 billion, predominantly related to The Board declared the fully franked 39:61 at balance date. aircraft acquisitions (including progress special dividend to maximise returns to payments), aircraft reconfiguration Qantas has managed its capital with shareholders by releasing accumulated costs, engine modifications and a primary focus on reducing financial franking credits and to distribute the significant terminal improvements risk. The success of this strategy has profit generated by the sale of part in Sydney, Melbourne, Brisbane enabled significant value to be delivered of the investment in EQUANT NV. and . to shareholders and the achievement of leverage in line with our target range. Qantas purchased four aircraft during Accordingly, the Dividend Reinvestment the year, two Boeing 767-300s and two Plan has been suspended. Boeing 747-400s, and has firm orders

UNBROKEN RECORD OF PROFIT IMPROVEMENT 7

Brought to you by Global Reports Carole Gé, Customer Sales Agent, Paris. James Munro, Contracts Manager, Qantas Simon Bernardi, Regional General “The Qantas office is on Boulevarde de la Holidays. “I negotiate on behalf of Qantas Manager, Queensland. “As Regional General Madeleine, not far from the Champs Elysées. Holidays with suppliers, hoteliers, tour Manager, my aim is to build the already strong It is like a tourist office for Australia. I sell operators and cruise companies to develop Qantas profile as well as generate sales in the tickets but I also give a lot of information ground arrangements for our package Queensland market, which involves me and about Australia. I recommend customers holidays. We make regular product briefing my team working with Queensland business should spend three weeks there to see trips and quality control inspections to keep and tourism bodies on a daily basis. the sights. abreast of trends. The new Qantas direct services from Brisbane I have been to Cairns, Uluru and Sydney and With the new Qantas flights to Hamilton to Los Angeles via Auckland are great news for discuss these destinations with my customers. Island, we expanded our range. The Queensland travellers. They’re also good news Australia offers visitors a refreshing diversity – Whitsunday region is one of the most beautiful for freight customers because of the direct link not only some of the mightiest cities but also holiday spots in Australia with year-round they provide with important export markets vast areas of near-wilderness.” weather to match and we’ve made sure we in the USA. offer enough holiday options to attract as We have also opened up the Whitsunday many people on as many budgets as possible.” region, with Airlink flying daily between Hamilton Island and Brisbane.” GROWING THE NETWORK

The development of markets with strong commercial potential in the USA and Europe, judicious entry into emerging markets and strengthened capacity at home have been the pillars of profitability in the last financial year.

THE AMERICAS UK AND EUROPE Qantas replaced its Osaka flights with Qantas announced in June 1999 that it In October 1998, Qantas recommenced daily codeshare services on Japan Airlines would fly to New York. The services from three services a week to Paris after aircraft from November 1998. Qantas Sydney via Los Angeles will commence a three-year break. operates 24 of its own services per week three times a week in late October 1999 Qantas aircraft fly 14 return services between Australia and Japan. increasing to five times a week from April a week to London, increasing to 17 Qantas suspended services to Beijing, 2000. These flights mark the return of in November 1999 with direct services continuing to operate three services Qantas aircraft to New York for the first to London Heathrow from Sydney and a week to Shanghai. time since 1973. Melbourne. Qantas also offers daily Qantas increased the frequency of its Qantas also announced in June that it services to Frankfurt and three services Manila flights from five Boeing 767 would fly non-stop between Melbourne a week to Rome. Flights connect to services per week to six Boeing 747 and Los Angeles from October 1999, these European services from all major services when Philippine Airlines offering Boeing 747-400 three-class Australian cities. withdrew its services to Australia in services five times a week. Greater engine ASIA June 1998. capability makes the non-stop operations Qantas continued to redirect capacity to Qantas introduced once-weekly, non- possible. Qantas will also operate direct, more profitable routes as a result of the stop, daylight flights between Brisbane same plane services between Brisbane ongoing effects of the economic situation and Bali from August 1998, using Boeing and Los Angeles via Auckland from in Asia. Qantas operates more than 767 aircraft. Qantas increased capacity October 1999. With the new timetable, 130 services a week to Asia as well to Jakarta in June 1999, replacing a Qantas will operate a total of 34 services as a number of intra-Asian services. It Boeing 767 service with a Boeing 747 each week to the USA including Hawaii. also offers services through codeshare service to match more closely the needs Qantas inaugurated flights to South arrangements with airline partners of business travellers. America in November 1998 with , Korea’s Asiana Airlines, The airline added a seventh flight twice-weekly services to the Argentine Airlines and Japan Airlines. between Sydney and Mumbai in August capital, Buenos Aires. 1998, taking the frequency to daily. 8 QANTAS 1999 ANNUAL REPORT

Brought to you by Global Reports Sophia Tigani – Statue of Liberty, New York

Qantas celebrated the 50th anniversary daily direct flights from Brisbane to of its first passenger service between Hamilton Island on its regional subsidiary, Australia and Hong Kong in June 1999. Airlink. The inaugural flight to Hong Kong in From July 1999, Qantas introduced 1949 stopped at Darwin and Labuan 16 additional services a week between (British North Borneo) before reaching its Sydney and Adelaide as well as twice- final destination more than 44 hours daily return flights between Adelaide and later. Today, Qantas operates 24 flights a on Airlink. From July 1999, week to Hong Kong from five Australian Airlink also introduced twice-daily Sophia Tigani, Customer Relations Officer, cities and provides daily services between Canberra to Melbourne services and a JFK Airport, New York (with Jim Bliku, Hong Kong and . twice-daily shuttle service between Alice Customer Relations Officer). “It’s exciting NEW ZEALAND Springs and Ayers Rock. In July 1999, for Qantas and it will be exciting for On the trans-Tasman route, Qantas added Airlink doubled its flights from Darwin to New Yorkers to see the kangaroo tail coming frequencies to the business markets Broome as well as increasing flights from in again to JFK after 26 years. Based on the between Sydney, Melbourne, Brisbane Perth to Broome to seven services a week. market over the past few years, there’s and Auckland and now offers more than Eastern Australia Airlines doubled the a lot of interest from First and Business Class 80 return flights a week on these routes. frequency of flights and capacity between customers in flying to Australia, especially from Following its success in 1998, Qantas Sydney and Coffs Harbour from 17 to 34 the financial district. Once they see that Qantas again offered a non-stop Saturday return flights per week in July 1999. is flying here, they’ll be even keener. service between Sydney and Queenstown In other scheduling modifications, Qantas Right now, I help out with the codeshare for 15 weeks during the 1999 ski season. introduced an additional four Boeing 737 operation with American Airlines, assisting INCREASED AUSTRALIAN CAPACITY services between Melbourne and Perth, with codeshare passengers and baggage, Qantas introduced daily Boeing 737 boosting capacity by 900 seats. ensuring everyone travelling to Australia has services between Sydney and Perth-Sydney-Perth services were the proper documentation. We want the customers to feel that they are actually Queensland’s Whitsunday holiday region upgraded to four Boeing 747 aircraft a boarding a Qantas aircraft. Everyone in through Hamilton Island from October week from July 1999, also providing an New York loves Australians – the reputation 1998. From July 1999, Qantas introduced additional 900 seats per week. of Qantas is very strong.”

GROWING THE NETWORK 9

Brought to you by Global Reports Michelle Maude, Licensed Aircraft Geoff Sartori, General Manager Flight George Nicol, Airline Services Operator, Maintenance Engineer, Line Maintenance, Safety/B767 Captain. “Qantas is a mature Cairns Airport. “I get the bags sorted out, Sydney. “I’ve been with Qantas for almost organisation in the way it conducts its flight make sure they go to the right place. Being nine years. My job is mainly receipt and dispatch safety and we’re always working to improve punctual is a big part of the job so that the of aircraft. I prepare the parking bay, the aircraft that process. plane turns around on time. If you’re over by arrives and I talk via the headset to the Flight We monitor the flight data from our aircraft, five minutes, you can miss connecting flights. Deck to check everything’s okay. We attend looking for any trends so we can provide You have to be fast in getting the bags out to any defects requiring attention immediately. feedback to our crew and, importantly, to the there, on the right plane and in the right If that’s all clear, we start our walk around and training section so that any findings can be position to balance the weight. visually check for any damage. incorporated into the training schedules. The regionals are the quickest to turn around; There’s not a lot that my male colleagues can We complete the loop. the engines cut off, they’re ready, all you have do that I can’t. With a wheel change, because I’ve been with the airline for 30 years. In Flight to do is unload, load them up again, make a 767 wheel is quite heavy, I’d call for Operations, pilot managers spend about two- sure everything is in order and then they’re off. assistance. That’s what everything’s about thirds of their roster in the office and one-third No fuss at all. I’d look after four or five – teamwork. What I really like is that I’m fixing flying. It’s a satisfying role in its diversity and regional aircraft a day.” things – doing a job, testing the system, then I still get to do the thing I love – fly aeroplanes.” sending the aircraft on its way.” FLEET FOR THE FUTURE

Qantas continued its disciplined approach to aircraft acquisition in 1998/99 with the focus on the efficient use of existing aircraft, as well as commencing a program to upgrade the Rolls-Royce engines on its Boeing 747-400 fleet.

AIRCRAFT FOR GROWTH by the end of 2001 and 13 spare engines SAFETY Qantas has begun implementing the fleet will be modified by the end of 2002. Qantas has recently decided to fit the development plan announced in the In other core fleet developments, two enhanced ground proximity warning 1997/98 financial year. Boeing 747-200s have been leased to system (EGPWS) to all its aircraft. Two of the three new Boeing 747-400 Air Pacific for six years. The first lease The EGPWS is the latest tool to be aircraft announced will enter service was renewed in August 1998, with the developed to reduce the incidence of in November 1999, with the third due second commencing in December 1998. ‘controlled flight into terrain accidents’ in March 2000. Three Boeing 747-400 The lease of a Boeing 737-300 aircraft (CFIT) which have been identified aircraft, purchased from other airlines in to Solomon Airlines was also renewed worldwide as a major cause of aircraft May 1998, September 1998 and March in July 1999. accidents in recent times. 1999, are currently undergoing Two Dash 8 aircraft entered service with Since March 1999, the Safety and refurbishment. Two new Boeing 767- Eastern Australia, one in October 1998 Environment Department has been 300s entered service in July and August and the other in February 1999. Another working towards the establishment of 1998 with a third due in July 2000. Dash 8 aircraft is scheduled to enter a quality management system that will In July 1998, Qantas announced plans to service with Airlink later this year. satisfy the requirements of ISO 9002 accreditation by the end of 1999. upgrade the existing Rolls-Royce engines ENGINEERING & MAINTENANCE on its Boeing 747-400 fleet. This will Qantas will increase the scope and extent JET SERVICES MILESTONE provide fuel savings as well as payload of engineering and maintenance at In July 1999, Qantas celebrated 40 years benefits on the longer range routes. Avalon airport in Victoria. The expanded of commercial jet services commencing The newer engine will enable Qantas to facility will undertake third party with the -138 aircraft type. commence the first commercial non-stop maintenance work for other international Qantas was the first airline outside operation between Melbourne and Los airlines as well as refurbishment work the USA to operate such aircraft. The Angeles in late October 1999. All Boeing on the airline’s international fleet and inaugural flight from Sydney to 747-400 series aircraft will be modified overflow work from the Qantas heavy San Francisco took 19 hours – a record maintenance base in Sydney. at the time.

10 QANTAS 1999 ANNUAL REPORT

Brought to you by Global Reports Ivo Cecala – Flinders Street Station, Melbourne

OPERATIONAL AIRCRAFT FLEET

Details as at 30 June 1999.

OWNED, HP & EXTENDABLE OTHER AIRCRAFT TYPE FINANCE LEASES OPERATING LEASES OPERATING LEASES TOTAL IN SERVICE

Boeing 747-400 15 6 – 21

Boeing 747-300 5 1 – 6

Boeing 747-200B 3 * – – 3 Ivo Cecala, Licensed Aircraft Maintenance Boeing 747SP 2 – – 2 Engineer, Heavy Maintenance, Melbourne. Boeing 767-300ER 16 5 – 21 “I’ve been a licensed aircraft maintenance Boeing 767-200ER 7 – – 7 engineer – LAME – for 10 years, starting as an apprentice Aircraft Instrument Maker Boeing 737-400 21 – 1 22 when I was 17. Being a LAME means I’m Boeing 737-300 16 – – 16 licensed to certify for work carried out on an TOTAL CORE FLEET 85 12 1 98 applicable aircraft type and take responsibility for instrument, electrical and radio work. British Aerospace BAe 146 – – 14 14 Heavy Maintenance in Melbourne has British Aerospace Jetstream 2 – – 2 around 250 staff members including the de Havilland Canada Dash 8 17 – – 17 necessary trade categories of mechanical, Shorts SD360 4 – – 4 avionics and structures.

TOTAL REGIONAL FLEET 23 – 14 37 To become licensed on an aircraft type, you need to pass around 20 Civil Aviation Safety TOTAL 108 12 15 135 Authority basic exams as well as complete a * Excludes two Boeing 747-200B aircraft on six-year leases to Air Pacific. 10-week Qantas aircraft type-specific training course. You also need around 1,500 hours of practical experience on the aircraft. Once licensed, you’re required to do additional training whenever the technology changes.”

FLEET FOR THE FUTURE 11

Brought to you by Global Reports Kevin Frost, Passenger Sales Agent, Joanna Er, Airport Duty Manager, Deborah Mosby, Senior Customer The Strand, London. “I really enjoy working Singapore. “I started with Qantas at the time Relations Officer, Los Angeles Airport. in a face-to-face environment. Although we moved into the new terminal here in “Everywhere I look things are growing, with I work in London, our business doesn’t all Changi Airport in 1981. the New York flight coming up in late October originate here. People from Manchester, Singapore is one of the biggest hubs outside and the direct Melbourne-Los Angeles flight. Edinburgh, Glasgow and Bristol all want Australia for Qantas and at Changi we are Everyone’s excited about them. to travel to Australia, so I often find myself joint hosts with British Airways – Qantas and I am one of the frontline managers at travelling to some of those cities. British Airways staff are working under the one Los Angeles Airport liaising with passengers Our focus is on generating revenue for the roof, sharing the same tearoom and attending on behalf of Qantas, making sure they are airline while maintaining a high level of to each other’s flights. treated well. My basic work station is at the customer service. I believe both elements As Airport Duty Manager, you switch hats ticket counter but I do work all around the are essential to our future success. Achieving whenever you are faced with a different airport. It’s the people contact that makes the right balance of these elements situation. I have 10 flights to process between me happy.” is really rewarding.” 6pm and midnight every night, when the last British Airways service leaves for London.”

MORE OPTIONS THROUGH

Major alliance developments – including the implementation of oneworld and the expansion of other airline partnerships – have given Qantas customers more options than ever in terms of schedules and destinations and increased frequent flyer opportunities.

CUSTOMERS REAP oneworld BENEFITS Frequent flyer programs have been cities with Qantas services operating oneworld forged ahead in February 1999 linked; top tier frequent flyers have been between Australia and Frankfurt and with the introduction of benefits for presented with new cards entitling them Australia and Paris. customers of Qantas, American Airlines, to appropriate privileges when travelling Qantas also began codesharing on British British Airways, Canadian Airlines and on any oneworld airline; and access Airways’ JSA services between Australia Cathay Pacific. to the airlines’ lounges has been and the UK via Kuala Lumpur in Finnair and Spain’s Iberia Airlines joined extended to eligible frequent flyers. December 1998. the alliance in September 1999. Between Other key benefits include smoother MORE OPTIONS FOR EUROPEAN TRAVEL them, the seven oneworld airlines now transfers for customers travelling across In addition to boosting European services offer customers more than 650 the global networks of the oneworld through Qantas-operated flights to Paris, destinations in 135 countries and access airlines and the new, round-the-world Qantas strengthened services to other to more than 230 lounges. oneworld Global Explorer fare. destinations in Europe and Scandinavia LanChile, the eighth member of the STRONGER TO THE UK through agreements with British Airways alliance, will come on board in 2000, Qantas continued to develop its strong and Swissair. once its customer service staff have taken network of alliance relationships through Qantas and Swissair began codesharing part in the oneworld training program a range of codesharing agreements between Australia and Switzerland in and its computer systems are linked to outside the oneworld framework. October 1998, in response to growing those of other oneworld airlines. As part of the Qantas/British Airways traffic between the two countries. Benefits include a range of initiatives Joint Services Agreement (JSA), Qantas Swissair codeshares on three Qantas designed to provide the airlines’ 200 added Birmingham, Manchester and flights a week between Sydney and million-plus customers with better service London (Gatwick) to its codeshare Singapore and Qantas codeshares on and more opportunities for rewards network in November 1998. British three Swissair flights a week between and recognition. Airways codeshare services link the three Singapore and Zurich.

12 QANTAS 1999 ANNUAL REPORT

Brought to you by Global Reports Kevin Frost – Big Ben, London ALLIANCES

Qantas began servicing three services since March 1999. These services Scandinavian cities in July 1999, connect with 24 weekly return Qantas codesharing on JSA partner British flights between Australia and Los Airways. Under the agreement, Qantas Angeles. Codeshare services operated offers double daily return services by Alaska Airlines since May 1999 to between London and Oslo, daily return Seattle and Portland also connect with services between London and Stockholm Qantas flights to Los Angeles. and daily services from London to DEVELOPING SOUTH AMERICAN SERVICES Copenhagen, six of which are Qantas expanded into the emerging return services. South American market in November NEW ZEALAND AND BEYOND 1998 – offering its own services to Qantas introduced non-stop codeshare Buenos Aires, plus a number of services between Auckland and Honolulu codeshare options to give customers in association with Air Pacific in May greater travel choices. Qantas customers 1999. The three return weekly services, can take advantage of four services a operated by Air Pacific, strengthen the week to the capital of the Argentine – Qantas schedule in the Pacific, two Qantas flights and two services supplement the existing daily services offered as codeshares with Aerolineas Qantas operates between Sydney and Argentinas. Qantas and LanChile also Honolulu and also feed codeshare began codeshare services in October services between Honolulu and Canada. 1998, following more than two years PARTNERSHIPS GROW IN THE USA of successful co-ordination of their Qantas added three new North American schedules through the French Polynesian destinations to its network – San Diego capital, Papeete. LanChile codeshares in California, Portland in Oregon, and on Qantas flights between Australia and Seattle in Washington – via new Tahiti via New Zealand and Qantas codeshare arrangements. American codeshares on LanChile services Airlines’ regional subsidiary, American between Tahiti and Chile. Eagle, has operated the San Diego

MORE OPTIONS THROUGH ALLIANCES 13

Brought to you by Global Reports Nick Ribarovski, Qantas Club Supervisor, Bill Holland, First Class Flight Attendant, Sarah Lynch, Level One Chef, Qantas Sydney Domestic Terminal. “I began as Long Haul. “I hope I bring a bit of humour Flight Catering. “As a fourth-year apprentice, an apprentice engineer with Qantas and had and enjoyment to the flight. I used to be what I was sent to work at Neil Perry’s restaurant, positions in Reservations and Check-in before we called a Designated Air Chef, organising Rockpool. I learnt all about the preparation of I started in the Qantas Club. the First Class food on the flight. Now we’ve the dishes we serve on board – how to achieve With my background I can explain a lot about changed the system and brought in First Class the same quality they do at the restaurant. the airline to our Club members – for example, Flight Attendants. I was lucky enough to be The produce we’re using is top of the range about engineering matters – and I can help chosen after the new product was introduced. and we take a lot more time to prepare the with their check-in at the front desk. It feels great when you know you’ve got dishes. Each menu item is more involved. The Lounge at Sydney Domestic Terminal is everything on board and customers are happy The Rockpool training is widespread. only a couple of years old. Everyone who walks – it’s easy to do the job. The apprentice position in the First Class in here says how fantastic it is. I think the best thing about the new First Class kitchen area changes every three months so As Supervisor, I believe if I can support staff is the style of service. Neil Perry has brought someone new learns the skills. We want to all the way then they will provide the ultimate a different approach. It’s just like a restaurant get everything 100 percent right. We have in customer service.” service – it flows smoothly and is a pleasure to to keep meeting the expectations.” present. What it says to our customers is that we take notice of what they want.” AUSTRALIA’S BEST FOOD,

Qantas has extended its restaurant-style cuisine from First to Business Class and introduced a new range of premium Australian wines, while continuing its program of investment in domestic terminals.

FINE DINING Australian wines on its domestic and TECHNOLOGY OF COMFORT Qantas continued its multimillion dollar international services in March 1999. Qantas has been fitting its Boeing 747- program of investment in its inflight Qantas chose wines produced by 27 400 international aircraft with luxurious product and service. After the successful Australian companies from key wine full-recline sleeper seats in First Class, launch of its restaurant-style dining in producing regions in , electronically-adjustable Dreamtime seats First Class in 1998, Qantas has extended Victoria, , South in Business Class and new ergonomically- the concept to Business Class. First and Australia, Tasmania and designed slimline seats with built-in Business Class quality produce and Capital Territory. Qantas invited more lumbar support and adjustable headrests ingredients are sourced from around the than 900 Australian wine companies to in Economy Class. airline’s international network. Qantas submit wines for a blind tasting, The 14 sleeper seats in First Class on the now undertakes more food preparation including many that the airline had never Qantas Boeing 747-400s fold down in the air than ever before, plating meals previously canvassed. The airline’s panel to a flat 198cm (6’6“) bed at the touch in the galleys and serving them in a more of internationally-acclaimed wine judges, of a button. This configuration provides personalised way to customers. led by Len Evans, chose from more than each passenger with aisle access. Each Leading Australian chef Neil Perry and his 560 wines. seat features an individual ottoman, Rockpool team developed the menus for The wines are being introduced personal video screen and two foldaway the new inflight cuisine and trained staff progressively into First and Business tables for dining, working and cocktails. at the airline’s catering centres worldwide Class over the next 12 months. In Business Class, the electronically- in the preparation and presentation of The choices will be changed several operated Dreamtime seat features premium fresh produce. times a year and different labels are carried five-way electronic adjustment with PREMIUM AUSTRALIAN WINE on flights from some regional cities. touch-pad controls to adjust legrest, A separate selection has been made for To complement the airline’s inflight dining lumbar support, seat recline and Economy Class due to the large volume innovations, Qantas introduced a new headrest positions. of wines required. and expanded range of 30 premium The slimline seats in Economy Class have been ergonomically designed. They have

14 QANTAS 1999 ANNUAL REPORT

Brought to you by Global Reports Barb Opie – Parliament House, Buenos Aires WINE AND SERVICE

built-in lumbar support and adjustable terminal. The Qantas Club lounge headrests with wings for additional neck has seating for 750 guests and a and head support. comprehensive business centre. Qantas has restyled the galleys and Valet parking offers customers express washrooms and revamped the aircraft parking, check-in and seat allocation interior colours and fabric, using designs service. The terminal has 14 gates, inspired by Australia’s reefs and two of which are capable of handling waterways to invigorate the cabins. Boeing 747 aircraft. Qantas continued work on the IMPROVED DOMESTIC TERMINALS Barb Opie, Flight Attendant, Long Haul Melbourne Domestic Terminal. The airline The airline’s continuing investment (with Denese Smith, Customer Service is spending $82.5 million to double the in domestic terminals will enable it to Manager, Long Haul). “The philosophy of size of the existing terminal, which will provide higher standards of customer our new Business Class is to present a product feature a new concourse area and four service while efficiently handling that is fresh for our customers and to treat more customers. new gate lounges capable of handling customers on an individual basis. widebody aircraft up to the size Qantas opened its new $250 million As well as being an active Flight Attendant, of a Boeing 747-400. Sydney Domestic Terminal in June 1999. I’ve been involved in training other cabin crew Designed for maximum passenger Several Qantas Club Lounges have on the new product and we’re embarking on comfort and ease of movement, the 32 undergone major refurbishment in the Phase Three – fine tuning. I’ve been part of a walk-through check-in counters expedite past 12 months. The Auckland Lounge team assisting and coaching cabin crew with the flow of more than 20,000 passengers has been overhauled, Christchurch has a the introduction of the Business Class product, currently using the terminal each day. new facility and the redevelopment of the in particular on the Hong Kong and Singapore routes. The terminal is expected to handle more Wellington Lounge is underway. The two than 30,000 customers per day during Qantas Club Lounges at Melbourne I think all crew would agree the whole the Sydney period. Airport are also receiving a facelift. The Business Class product is continually evolving.” new Melbourne Domestic Qantas Club The design separates arrivals and Lounge will open in late 1999 and departures and includes an automated Melbourne International Lounge early baggage sorting system – the first in 2000. to be installed in an Australian domestic

AUSTRALIA’S BEST FOOD, WINE AND SERVICE 15

Brought to you by Global Reports Robert Lee Morrison, Assist Agent, Mark Courtney, Senior Application Stewart Lindsay, Storeman, . Telephone Sales Centre, Tucson. “This is the Manager, Information Technology “I like working for Qantas – I must, I’ve been first year we’ve had a Help Desk to support (with Eileen Baghoomians, Area Manager, here, in the Freight Department, for over our reservation staff at the Call Centre. I work Year 2000 Project). “I’ve been with Qantas, 11 years. as an Assist Agent on the Help Desk – I deal working in Information Technology, for more Being here for so long, I have a good idea about with any technical questions, any problems. than 18 years and joined the Year 2000 Project what happens to the freight we look after, from I’ve been at the Call Centre for five years and in July 1997. It’s been the team’s job to make the time it arrives to the time it leaves. the Help Desk has really freed up reservations sure that every aspect of the airline’s business One of the best things about my job is the team staff to help more callers. They’re not bogged is Year 2000 compliant. This includes not only I work with. We all get along really well and down with lengthy calls – they can pass them the computer systems, but everything with help each other. It can get really busy at times. up to me. This way fewer people are on hold. a chip in it, as well as external suppliers and There have been some changes in the last few I have all the product knowledge and if I don’t customers. We are also ensuring that every years – the cargo agents would have seen most know the answer, I know where to find it. Qantas business unit has a Business Continuity of them, with the Internet services coming in. In this job you can just relax. People want to Plan in place. And the airport has certainly changed. I can hear you laughing. You take the call and It’s been a huge project management task, hardly recognise it – bigger, better, shinier establish contact with that person quickly. working out what has to be done and who than ever.” Every call is different, every time.” in which department is responsible and accountable for looking after each component.” TECHNOLOGY INTO THE

Qantas is spending some $112 million to ensure its readiness for the Year 2000. The airline is also investing in sophisticated telecommunications and has introduced a range of electronic initiatives to improve customer access to bookings, travel information and tracking freight.

YEAR 2000 PROGRAM Qantas is working with Australian and STATE OF THE ART TELECOMMUNICATIONS Qantas is preparing for the Year 2000 international organisations such as the In August 1998, Qantas and Telstra transition with a program designed to International Air Transport Association signed a contract for the building ensure the continued operation of the (IATA) and the Association of Asia Pacific and management of a new airline’s critical computer systems and to Airlines (AAPA) to resolve Year 2000 telecommunications network. The six-year assess the readiness of critical service issues. The airline is working with the project will give the airline one of the providers such as utilities, airports and air Australian Departments of Transport most advanced telephone, computer, traffic control authorities. Contingency and Regional Services and of Foreign Internet and intranet networks, plans have been developed for suppliers Affairs and Trade and has made direct connecting its operational and who provide services which, if disrupted, representations to foreign airspace and administrative offices around Australia might impact on the operation of the airport authorities. and enhancing service to customers. airline. Qantas is assessing, rectifying, The Qantas computer reservation system Qantas has signed an agreement testing and monitoring critical equipment holds bookings for international and selecting SITA as the preferred supplier at its 500 locations worldwide, liaising domestic customers up to 355 days for the replacement and subsequent with key suppliers and playing a major in advance and has successfully passed operation of the airline’s international role in the aviation industry’s review of exhaustive testing. Travel agents and telecommunications network. The system operational issues. Qantas staff around the world began provides telephone, computer, Internet The manufacturers of the aircraft used making bookings for travel in the year and intranet links between the airline’s by Qantas (Boeing, British Aerospace 2000 in January 1999. operational and administrative offices, and Bombardier) have advised that there Qantas will only fly if it is safe to do so. worldwide. are no safety or airworthiness issues Therefore, some contingency plans relating to Year 2000 compliance of involve reduced frequency of flights on their aircraft. some domestic and international routes during the contingency period.

16 QANTAS 1999 ANNUAL REPORT

Brought to you by Global Reports Jenny Gill – Opera House, Sydney NEXT MILLENNIUM

INTERNET INITIATIVES Hong Kong, Denpasar, Jakarta and Port In February 1999, Qantas introduced Moresby in June and July 1999. The bookings via its Internet site – service was extended to Honolulu and www.qantas.com.au – for travel on its Los Angeles flights in August 1999. domestic network. The move followed E-MAIL FREIGHT TRACKING the earlier introduction, in July 1998, In March 1999, Qantas Freight added of the airline’s Internet booking service e-mail to the range of electronic options for Qantas Frequent Flyer awards. available for customers to check the The Qantas web site triumphed over progress of their freight consignments. Jenny Gill, Customer Sales Consultant, more than 230 entries to win the By sending a standard e-mail, customers Qantas Travel Centre, Chifley Square, Commercial category of the prestigious receive an electronic response from the Sydney. “I have been with Qantas for a little Australian Financial Review/Telstra Qantas Freight operating system, over three years. I had travelled a fair bit and Internet Awards 1998. Contenders in the 24 hours a day, seven days a week. loved it and liked the idea of making my living Commercial category included service TELEPHONE CALL CENTRES talking to people about their own travel. providers, retailers and manufacturers A new $10 million Qantas Telephone Call Here at the Chifley Square Travel Centre, from a large number of diverse areas. Centre in Hobart is under construction. we look after retail customers who walk in off Qantas Holidays launched an Internet When completed, the facility will have the street as well as corporate clients. My area service on the Qantas web site providing the capacity to employ 500 people and is called ‘corporate leisure’, which means I help around-the-clock information on package handle more than four million corporate customers with their holiday travel. holidays worldwide in September 1998. international and domestic calls each year. One of the fastest growing developments over E-TICKET EXPANDS the last couple of years has been the use The Qantas E-Ticket, launched for of E-Ticket. It is really popular with corporate customers – and not just for their business domestic travel in July 1997, has been travel – because it’s so easy and convenient.” extended progressively to selected international routes. Qantas introduced its E-Ticket for trans-Tasman flights in October 1998 and rolled out the service for flights between Australia and Manila,

TECHNOLOGY INTO THE NEXT MILLENNIUM 17

Brought to you by Global Reports PART OF THE COMMUNITY

Qantas supports a wide range of sporting, cultural, charitable, community and environmental organisations and activities. Through these associations, the airline plays an active role in many key aspects of the nation’s daily life.

SPONSORSHIP The largest of its sporting sponsorships, the Qantas Australian Qantas sponsorship arrangements, which generally have some Formula One Grand Prix staged at Melbourne’s Albert Park commercial basis, embrace some of Australia’s best known in March, generates worldwide profile through television institutions, events and individuals. and other media coverage.

They highlight the relationship that Qantas has developed Qantas has harnessed its resources to assist such worthwhile with sport, business, the arts and the community over causes as the UNICEF Change for Good program which has the years. raised almost $5 million since 1991 and has since been adopted by many other airlines. Historically, Qantas and the nation’s sporting ethos have been inextricably linked. The sporting champions, teams and world Among the many charities that Qantas supports is the class events meld into a rich tapestry of association reflecting Starlight Children’s Foundation, for which the airline raised the growth of the airline since its foundation in Queensland an additional $410,000 from late 1998 through the sales of in 1920. a CD of Christmas Carols recorded by the children’s choirs which featured in the latest Qantas international television Few Australian companies have had such an extensive and advertisements. enduring relationship with the country’s most outstanding sporting achievers in such varied disciplines as golf, tennis, In the cultural sphere, the airline has close relationships with motor sport, virtually all codes of football, swimming, skiing, such prestigious organisations as , the Sydney netball, baseball, softball, badminton, rowing, women’s Dance Company, the National Gallery of Australia, the Art hockey, gymnastics, table tennis, cycling and the triathlon. Gallery of NSW, the National Gallery of Victoria, the Australian Brandenburg Orchestra and the Sydney Festival. The airline is traditionally the carrier of Australian teams and individuals to major international arenas including important Performing arts involvements have spanned major musicals tennis and golf tournaments, rugby union matches and such as The Boy from Oz, Rent and Chicago as well as events swimming and athletic meets. like the ballroom dancing spectacular, Burn The Floor, which toured Australia in 1999. The airline also sponsors a number of the country’s most outstanding sporting achievers, including the world 500cc Qantas is also supporting the recording of the complete motorcycle champion, Michael Doohan, golfer Greg Norman, Beethoven piano sonatas by Australian concert pianist Wallaby rugby union captain John Eales, swimmers Kieren Gerard Willems. Willems is making the recording using Perkins, Susie O’Neill and Ian Thorpe, and the remarkable two revolutionary hand-crafted pianos – built by Australian wheelchair racer, Louise Sauvage. Wayne Stuart – which have received praise worldwide for their sustaining qualities, clarity and range. Qantas featured some of the high profile sporting achievers in a television image campaign to complement the Qantas supports the visual as well as the performing arts and announcement of the multimillion dollar relaunch of its has assembled a collection of works by some of the country’s product and service, focused on the complete refurbishment leading painters, including Brett Whiteley. of its entire fleet, new service standards and enhanced The airline’s major sponsorships include: inflight dining.

18 QANTAS 1999 ANNUAL REPORT

Brought to you by Global Reports Australian record-breaking swimmer, Sydney Dance Company, performs The 1999 Australian Fashion Week. Ian Thorpe, at the Qantas 1999 Pan Pacific Graeme Murphy’s Salome. Design by Morrissey. Swimming Championships.

SPORT CULTURE ENVIRONMENT COMMUNITY CHARITABLE SPECIALIST Qantas Australian Opera Australia Clean-up Australia Care Australia Starlight Children’s Australian Fashion (Formula One) Foundation Week Sydney Dance Zoological Parks National Australia Grand Prix Company Board of NSW Day Council UNICEF Change Tasting Australia Qantas Australian for Good National Gallery of Banksia Foundation Pathfinders Wine Australia Motorcycle Victoria Sydney City Mission Grand Prix Prime Minister’s Committee for Art Gallery of NSW Employer of Economic Indy Car the Year Development Sydney Festival Australian Open of Australia Tennis Museum of Contemporary Art Australian Rugby Union Australian Brandenburg Netball Australia Orchestra Australian Water National Gallery Polo of Australia Swimming Musica Viva Australia Inc Recording of the Beethoven piano sonatas

Playbox Theatre Company

QANTAS 1999 ANNUAL REPORT 19

Brought to you by Global Reports RECORD PERFORMANCE FOR QANTAS CHOIR More than 1,200 children formed a giant kangaroo-shaped choir at the Bledisloe Cup Rugby Union match between Australia and New Zealand in August 1999, in the biggest performance of its kind ever undertaken at . Amongst the singers performing the Qantas signature song, I Still Call Australia Home, were children from the Australian Girls Choir and the National Boys Choir – both of which feature in the airline’s television advertising. The choirs celebrated another success in 1999, with the nomination of the Qantas CD, Australia’s Christmas Spirit, for an Australian Record Industry Association (ARIA) Award. Australia’s Christmas Spirit, nominated in the Best Children’s Album category, went platinum and sold more than 71,000 copies in 16 countries, raising $410,000 for the Starlight Children’s Foundation.

20 QANTAS 1999 ANNUAL REPORT

Brought to you by Global Reports QANTAS 1999 ANNUAL REPORT 21

Brought to you by Global Reports BOARD OF DIRECTORS

GARY PEMBERTON, AC JAMES STRONG GARY TOOMEY Chairman Chief Executive and Managing Director Deputy Chief Executive Officer & Chief Financial Officer

BOB AYLING MIKE CODD, AC JOHN DUCKER, AO

Non-Executive Director Non-Executive Director Non-Executive Director

TREVOR EASTWOOD, AM MARGARET JACKSON JIM KENNEDY, AO, CBE

Non-Executive Director Non-Executive Director Non-Executive Director

TREVOR KENNEDY, AM ROGER MAYNARD NICK TAIT

Non-Executive Director Non-Executive Director Non-Executive Director

22 QANTAS 1999 ANNUAL REPORT

Brought to you by Global Reports GARY PEMBERTON, AC Solicitors, from September 1989 He is currently Chief Executive JOHN DUCKER, AO Chairman to June 1992 and Group Chief Officer and a Director of British Non-Executive Director Age 59 Executive of DB Group Limited in Airways Plc and a Director of Age 67 New Zealand from July 1992 until International Pty Limited Mr Pemberton was appointed Mr Ducker was appointed to October 1993. and World Aviation Services to the Board in February 1993 the Board in August 1983. (Australia) Pty Limited. and as Chairman in March 1993. GARY TOOMEY He is Chairman of Qantas Mr Ayling joined British Airways Plc He is Chairman of TAB Limited and Deputy Chief Executive Superannuation Limited and of the in 1985 as Legal Director and in a Director of Rio Tinto Limited, Rio Officer Safety, Environment & Security July 1988 was appointed Director Tinto Plc, Queensland Investment Committee and is a member of Age 44 of Human Resources. the Audit Committee. Corporation, NM Rothschild Mr Toomey was appointed to the In September 1991, he became Australia Holdings Pty Limited, Board in December 1993. He is a Mr Ducker is a founding Fellow Marketing and Operations Director NM Rothschild & Sons (Australia) Director of a number of controlled of the Australian Institute and was appointed Chief Executive Limited and Billabong Holdings entities of Qantas. of Company Directors, Managing Officer in January 1996, having Australia Limited. Director of Indrel Consulting He is a Director of Australia and been Group Managing Director Mr Pemberton was Chief Executive Pty Limited, a Director of Edelman New Zealand Banking Group since February 1993. A solicitor by of Brambles Industries Limited World Wide, Aristocrat Leisure Limited and Air Pacific Limited. He profession, he has been involved in from 1983 to 1993, and also held Limited, GIO Australia Holdings is also a Fellow of The Institute of air transport and international the offices of Chairman from Limited and GIO Building Society Chartered Accountants in Australia, commerce throughout his career. Limited and Chairman of the March 1993 to August 1994 and the Australian Society of Certified MIKE CODD, AC New South Wales Ambulance Deputy Chairman from August Practising Accountants and several Service Board and of The Duke 1994 to November 1996. He was other professional bodies. Non-Executive Director formerly President of the Sydney Age 59 of Edinburgh’s Award Scheme Mr Toomey was previously Chief Organising Committee for the Australia (New South Wales Financial Officer of Arnott’s Mr Codd was appointed to the Olympic Games, and a Director Division). Limited. Before this he was Chief Board in January 1992. He is a of Commonwealth Bank of He held a number of management Financial Officer of Australian member of the Audit Committee. Australia, CSR Limited, John Fairfax positions with the Labor Council Airlines Limited from 1987 to Mr Codd is Chancellor, University Holdings Limited and Australian of NSW before becoming Vice 1992, Company Secretary and of , and a Director of Airlines Limited. President of the Australian Council Finance Manager of The Telstra Corporation Limited, MLC of Trade Unions in 1977. Phosphate Co-operative Company Limited, MLC Lifetime Limited, JAMES STRONG Mr Ducker was also General of Australia Limited for four years CitiPower Pty, Australian Nuclear Chief Executive Manager of radio station 2KY and and Company Secretary for Rocke Science and Technology Age 55 Chairman of radio station 2HD. Mr Tompsitt & Co Limited from 1981 Organisation (ANSTO), Toogoolawa Ducker was formerly a Member of Mr Strong was appointed to the to 1982 and was appointed Group Consulting Pty Limited and the Board of Governors of the Board in January 1991 and Company Secretary of Rocke’s The Menzies Foundation. He is National Institute of Labour as Managing Director in holding company FH Faulding & a member of the Advisory Boards Studies and was the Foundation October 1993. He is a member Co Limited in 1983. Mr Toomey of Spencer Stuart and Blake Chairman of Work Skill Australia. of the Safety, Environment & has a chartered accounting Dawson Waldron. He previously held the position Security Committee and background having worked for From 1981 to 1986, Mr Codd of Chairman of the NSW Public Chairman of a number of Peat Marwick Mitchell & Co from held senior positions in the Service Board and also served as controlled entities of Qantas. 1976 to 1978 and Parkhill, Commonwealth Government as, a Member of the Legislative Lithgow and Gibson from 1979 He is admitted as a barrister and consecutively, Secretary of the Council of NSW. He was formerly to 1980. solicitor in various Australian Department of Employment and a Director of NRMA Building jurisdictions. BOB AYLING Industrial Relations, Chairman Society Limited. Mr Strong was Chief Executive Non-Executive Director of the Industries Assistance Commission and Secretary of of Limited from Age 53 December 1985 to September the Department of Community Mr Ayling was appointed to the 1989, National Managing Partner, Services. From 1986 to 1991, Board by British Airways Plc in later Chairman of Partners, he held the positions of Head January 1997. of Corrs Chambers Westgarth, of Department of the Prime Minister and Cabinet, and Secretary to Cabinet.

QANTAS 1999 ANNUAL REPORT 23

Brought to you by Global Reports BOARD OF DIRECTORS continued

TREVOR EASTWOOD, AM Ms Jackson was a Partner of Australian Post Office and the Mr Maynard joined British Airways Non-Executive Director KPMG Peat Marwick’s Commissioner of Review into Plc in 1987 and was Executive Age 57 Management Consulting Division Corrective Services in Queensland. Vice President North America. and National Chairman of the He was also previously a Director Prior to joining British Airways Plc, Mr Eastwood was appointed to KPMG Micro Economic Reform of Commonwealth Bank of he served as Counsellor, Aviation the Board in October 1995. Group until 30 June 1992, when Australia, MIM Holdings Limited, and Shipping, at the British He is Chairman of West Australian she resigned to pursue a full-time Pacific Dunlop Limited, Santos Embassy in Washington DC Newspapers Holdings Limited, career as a company director. Limited and QCT Resources and was Assistant Secretary for Gresham Partners Holdings Limited She was formerly a Director of Limited. Mr Kennedy, a chartered Aerospace at the Department of and Gresham Rabo Management Telecom Australia and the accountant and public company Trade and Industry in London. Limited. He is a Director of Australian Wool Corporation director, is well known for his NICK TAIT Wesfarmers Limited and Avatar and Chairman of the Victorian contribution to the tourism Non-Executive Director Industries Limited and a Fellow State Council of The Institute industry as well as to business. of Curtin University, the Australian of Chartered Accountants Age 60 TREVOR KENNEDY, AM Institute of Management, the in Australia. Mr Tait was appointed to the Non-Executive Director Australian Academy of Board by British Airways Plc in JIM KENNEDY, AO, CBE Technological Sciences and Age 57 March 1993. He is a member Non-Executive Director Engineering and the Australian Mr Kennedy was appointed of the Safety, Environment Institute of Company Directors. Age 65 to the Board in April 1994. & Security Committee. Mr Eastwood was formerly Mr Kennedy was appointed to Mr Kennedy is Chairman of Oil He is General Manager Managing Director of Wesfarmers the Board in October 1995. Search Limited, AWA Limited, Investments and Joint Ventures Limited, Chief Executive of He is Chairman of Queensland Kilkenny Gold NL and Cypress Australasia for British Airways Plc Westralian Farmers Co-operative Investment Corporation and the Lakes Group Limited and Deputy and is also a Director of Concorde Limited and Chairman of Orion Steering Group for an Economic Chairman of Darowa Corporation International Travel Limited and Resources NL, KLZ Limited and Development Strategy for Limited. He is a Director of several World Aviation Systems (Australia) Gresham Technology Management Brisbane and Deputy Chairman other public and private Pty Limited. Limited. He has held various seats of GWA International Limited. companies including Downer Mr Tait joined British Airways Plc on State and Federal Government He is a Director of Australian Stock Group Limited and is a Member in Australia in 1964 and has held councils. Exchange Limited, Macquarie of the Federal Government a variety of management positions MARGARET JACKSON Industrial Management Limited Remuneration Tribunal. in that company, including and Suncorp-Metway Limited. Non-Executive Director Mr Kennedy was formerly positions in Australia and overseas. He is a member of the Advisory Age 46 Managing Director of Consolidated Board of Blake Dawson Waldron, Press Holdings Limited, a Director Ms Jackson was appointed the Prime Minister’s Community of OzEmail Limited and has to the Board in July 1992. Business Partnership, the previously served on a number She is Chairman of the Queensland University of of other boards and State and Audit Committee. Technology’s Australian Centre Federal Government authorities. Ms Jackson is Chairman of for Strategic Management and ROGER MAYNARD Victoria’s Transport Accident the Development Council of Commission, Playbox Theatre the University of Queensland. Non-Executive Director Company Pty Limited and Mr Kennedy is a former Age 56 Malthouse Pty Limited and a Chairman of the Australian Mr Maynard was appointed to Director of ANZ Grindlays Bank Postal Commission, the Australian the Board by British Airways Plc Limited, Australia and New Government Inquiry into Tourism, in March 1993. He is a member Zealand Banking Group Limited, the Queensland Corrective Services of the Audit Committee. Pacific Dunlop Limited and The Commission and the Queensland He is currently Director of Broken Hill Proprietary Company Tourist and Travel Corporation and Investments and Joint Ventures for Limited. Ms Jackson is a Fellow the former Deputy Chairman of British Airways Plc, having been of The Institute of Chartered the Australian Tourist Commission. Director of Corporate Strategy Accountants in Australia. He was a Member of the Royal from 1991 to 1996. Commission of Inquiry into the

24 QANTAS 1999 ANNUAL REPORT

Brought to you by Global Reports SENIOR MANAGEMENT

James Strong * Greg Bee David Hawes Adam Moroney Chief Executive and Group General Manager Group General Manager Deputy Chief Financial Managing Director Cabin Services Government Relations Officer

Gary Toomey * John Borghetti Ray Heiniger Andrew Pondekas Deputy Chief Executive Group General Manager Group General Manager Group General Manager Officer Australia Sales Flight Operations QFCL

Geoff Dixon * Mike Caldwell Col Hughes Barry Robinson Deputy Chief Executive Group General Manager Group General Manager Group General Manager Officer Purchasing oneworld Sales Taiwan

David Burden * Trevor Crabtree Brett Johnson Paul Shepanski Executive General Manager Group General Manager General Counsel Group General Manager Corporate Services Engineering & Maintenance & Company Secretary e-Commerce

David Forsyth * David Cox Narendra Kumar Bernard Shirley Executive General Manager Group General Manager Group General Manager Group General Manager Aircraft Operations Regional Airlines & Fleet Commercial Services Public Affairs, Sponsorships Planning & Promotions Steve Mann * Ken Lewis Executive General Manager George Dalidakis Group General Manager Kevin Turnbull Strategic Planning Group General Manager Safety & Environment Group General Manager Strategy Development Operations Services Denis Adams Alan Loke Group General Manager Paul Edwards Group General Manager Michael Vodicka Commercial Business Group General Manager North Asia Sales Group General Manager Commercial Strategy Systems Delivery John Anderson Wally Mariani Group General Manager George Elsey Group General Manager Geoff Brown Airports Group General Manager Pacific & The Americas Sales General Manager Human Resources Internal Audit Geoff Askew Sandra McPhee Group General Manager Peter Frampton Group General Manager Grant Fenn Security & Investigation Group General Manager Marketing General Manager Services Freight Corporate Finance & Ian Mitchell Financial Planning Peter Gregg Group General Manager Deputy Chief Financial UK, Europe & SE Asia Sales Rob Sharp Officer General Manager Projects Office

* Executive Committee Members.

QANTAS 1999 ANNUAL REPORT 25

Brought to you by Global Reports CORPORATE GOVERNANCE

In fulfilling its responsibility to protect and enhance shareholder value, The Board formally reviews its performance annually. At that review, the Qantas Board: the Non-Executive Directors discuss the performance of the Board and • sets and regularly reviews strategic direction; the Committees. The Non-Executive Directors then meet with the Chief • ensures appropriately skilled management are employed to Executive to review governance issues and the working relationship implement agreed strategies; between the Board and management. • monitors operating and financial performance; BOARD MEETINGS • identifies areas of significant business risk and ensures The Board holds 11 formal meetings a year. Given the significant management takes appropriate action to manage those risks; domestic and international operations of the airline, the Board travels • monitors management; and to Qantas operations outside Sydney. During the year, the Board held • reports to shareholders. meetings in Brisbane, New Zealand and Singapore. BOARD STRUCTURE Board Agendas are settled by the Chief Executive in conjunction with The Qantas Constitution allows for the appointment of up to the Chairman. The Board spends a considerable amount of time at 12 Directors. There are currently 12 Directors: each meeting reviewing the strategic, operational and risk • seven independent Non-Executive Directors elected by shareholders management issues facing the airline. In addition, at each meeting, other than British Airways – these Directors neither have any the Chief Executive updates the Board on all material issues. substantial supplier/customer relationship nor have they had a previous executive role within Qantas; A two-day meeting is held each year to review and approve the • three Non-Executive Directors who are appointed by British Airways strategic and financial plan for the next financial year. (BA Directors). This right was acquired from the Australian Attendance at 1999 Board Meetings is detailed on page 31. Government in 1993 when British Airways purchased its 25% shareholding in Qantas; and COMMITTEES • two Executive Directors (the Chief Executive and the Deputy Chief The Board does not believe it is appropriate to delegate major Executive Officer & Chief Financial Officer). functions to Committees. As such, all Directors participate in the consideration of matters relating to corporate governance, The Chairman is an independent Non-Executive Director. remuneration, succession planning and Board nominations. Only two In accordance with the Constitution and the Listing Rules, the formal Committees have been established: the Audit Committee and independent Non-Executive Directors are subject to re-election by the Safety, Environment & Security Committee. shareholders every three years. Neither the BA Directors nor the In addition, the Constitution requires the maintenance of a Executive Directors are subject to this requirement. Nominations Committee. The function of this Committee is solely to To ensure the independence of the Qantas Board and to protect the approve the person to be appointed as Chairman. This Committee airline’s position as an Australian flag carrier, the Qantas Constitution (made up of Mike Codd, John Ducker and Nick Tait) did not meet provides that: during the year. • at all times, at least two-thirds of the Directors must be Under the respective Terms of Reference of the Audit Committee and Australian citizens; the Safety, Environment & Security Committee, members are • the Chairman must be an Australian citizen; responsible for the review of certain detailed technical areas of the • whilst British Airways has the right to appoint the BA Directors, airline’s operations, identifying areas of significant business risk in it cannot vote in any election of Directors by shareholders; and these areas and ensuring that arrangements are in place to manage • a quorum for a Directors’ Meeting must include a majority of these risks. Committees can only make recommendations on these non-BA Directors who are Australian citizens and at least one issues for decision by the full Board. All Directors have an open BA Director (unless waived). invitation to attend Committee Meetings.

Should a vacancy arise, any new independent Non-Executive Director Membership and attendance at 1999 Committee Meetings are would be chosen by the other non-BA Directors. The Board would detailed on page 31. first review the mix of skills and experience of the existing Directors, When appropriate, the Board has formed ad hoc working groups to then choose a candidate who would enhance the ability of the Board consider specific issues and report back to the Board. No such group to maximise shareholder return. operated during the year. Shareholders would be asked to re-elect this Director at the next The Qantas Constitution requires each Committee to include General Meeting. a BA Director as a member. British Airways acquired this right from Qantas Directors have no minimum share ownership requirement. the when it purchased its 25% shareholding See page 31 for details of Directors’ shareholdings. in Qantas.

26 QANTAS 1999 ANNUAL REPORT

Brought to you by Global Reports AUDIT COMMITTEE COMPENSATION The primary objective of the Audit Committee is to assist the Board The aggregate maximum Non-Executive Directors’ fees are set by in fulfilling its responsibilities in regard to the accounting and shareholders. The Directors set individual fees by reference to fees reporting practices of the Qantas Group. In addition, the Committee: paid by comparable listed companies. No performance related • reviews the financial information presented by management to the payments are made to Non-Executive Directors. Details of Directors’ market, shareholders and regulators with particular regard to fees paid during the year are on page 32. compliance with statutory obligations; The Board sets the compensation of the Chief Executive, James • evaluates the effectiveness of administrative, operating and Strong, and reviews the compensation arrangements of the Deputy accounting controls used by the Qantas Group; Chief Executive Officers and other members of the Qantas Executive • recommends to the Board the appointment of the Qantas Committee. Executive Directors are not present when the Board external auditors; considers their remuneration. • oversees and appraises the scope and quality of the audits conducted by the Qantas internal and external auditors; and The Board sets remuneration packages so they properly reflect the • maintains, by regular scheduled meetings, open lines of relevant person’s duties and responsibilities and are competitive in communication with the internal and external auditors. attracting, retaining and motivating employees of the highest calibre. The Audit Committee has fulfilled its responsibilities under its Terms Independent advice is obtained to ensure remuneration is in line with of Reference during the year. market rates, both within the Australian market and the international aviation market. Remuneration packages are structured to ensure that Four Directors serve on the Audit Committee. Three (including the a significant part of the individual’s reward is dependent on the Chairman of the Committee) are independent Non-Executive achievement of shareholder wealth. Details of remuneration for the Directors and the fourth is a BA Director. last 12 months are on page 32. The Committee usually meets four times a year. At each meeting, EXTERNAL ADVICE the Committee members meet privately with the internal and external Should the Board or an individual Director consider it necessary to auditors. This allows the auditors to raise any issues they would prefer obtain independent professional advice in carrying out their duties, not to discuss in the presence of management. the matter would be discussed with the Chairman and any advice The Committee also meets privately with management to discuss any considered necessary obtained at the expense of Qantas. performance issues which may have arisen in respect of the internal QANTAS POLICY MANUAL & CODE OF CONDUCT or external auditors. During the year, the Qantas Policy Manual was reissued. All existing SAFETY, ENVIRONMENT & SECURITY COMMITTEE policies were reviewed and, if relevant, were updated and rewritten The Board places particular focus on the safety, environment and in clear language. Obsolete policies were removed. security aspects of the airline. The Safety, Environment & Security The Qantas Policy Manual is made up of the following sections: Committee is responsible for reviewing these critical areas and • Corporate Governance; reporting to the Board. • Financial Management; The Committee receives detailed reports on all safety, environment • Commercial; and security aspects of the airline and ensures that the appropriate • Human Resources; procedures are in place to protect the airline, its passengers and the • Occupational Health & Safety; community. • Security; Particular matters for the attention of the Committee include: • Information Technology; and • compliance with all safety, environment, security and associated • Purchasing. legal and regulatory requirements; The principal policy in the Corporate Governance section of the • review of preventative steps and procedures; Policy Manual is the Qantas Code of Conduct. Under this Code, • review of contingency and emergency planning strategies; all Directors and employees must comply, at all times, with all laws • adequacy of reporting systems for actual or potential accidents, governing the airline’s operations. The Code also requires that Qantas breaches and incidents; and operations are conducted in keeping with the highest legal, moral • subsequent investigation and remedial action. and ethical standards. Particular focus in the last 12 months has been on the Year 2000 The Code deals with a number of matters, including: readiness of Qantas. • Compliance with Laws and Regulations; Three Directors serve on the Safety, Environment & Security • Unacceptable Payments; Committee. The Chairman of the Committee is an independent • Protection of Qantas Assets; Non-Executive Director. The other members are the Chief Executive • Proper Accounting and Dealing with Auditors; and a BA Director. The Committee usually meets four times a year. • Conflict of Interest and Use of Inside Information; and The Safety, Environment & Security Committee has fulfilled its • Insider Trading. responsibilities under its Terms of Reference during the year.

QANTAS 1999 ANNUAL REPORT 27

Brought to you by Global Reports PERFORMANCE SUMMARY QANTAS GROUP

1999 1998 Increase/ $m $m (Decrease) %

FINANCIAL RESULTS SALES AND OPERATING REVENUE Net passenger revenue 6,437.5 6,188.3 4.0 Net freight revenue 553.4 547.8 1.0 Tour and travel sales 510.3 510.7 (0.1) Other sources * 947.5 884.7 7.1

TOTAL SALES AND OPERATING REVENUE 8,448.7 8,131.5 3.9 EXPENDITURE Manpower and staff related costs 2,206.0 2,196.8 0.4 Selling and marketing 947.9 914.5 3.7 Aircraft operating – variable 1,679.4 1,551.8 8.2 Fuel and oil 761.6 888.5 (14.3) Property 216.1 205.7 5.1 Computer and communication 346.1 272.7 26.9 Depreciation and amortisation 540.4 531.4 1.7 Non-cancellable operating lease rentals 107.8 138.8 (22.3) Tour and travel cost of sales 439.0 412.7 6.4 Capacity hire, insurance and other 502.6 436.9 15.0

TOTAL EXPENDITURE 7,746.9 7,549.8 2.6

EARNINGS BEFORE INTEREST AND TAX 701.8 581.7 20.6 Net interest expense (100.1) (103.7) (3.5)

OPERATING PROFIT BEFORE TAX AND ABNORMALS 601.7 478.0 25.9 Abnormal items 60.8 – n/a

NET PROFIT BEFORE TAX 662.5 478.0 38.6 Income tax expense (241.6) (173.0) 39.7

NET PROFIT AFTER TAX 420.9 305.0 38.0 BALANCE SHEET Total assets 11,226.6 10,358.8 8.4 Total liabilities 8,166.7 7,396.4 10.4

TOTAL SHAREHOLDERS’ EQUITY 3,059.9 2,962.4 3.3 CASH FLOWS Net cash provided by operating activities 1,208.3 1,218.4 (0.8) Net cash used in investing activities (628.9) (668.0) (5.9) Net cash used in financing activities (396.4) (592.3) (33.1)

NET INCREASE/(DECREASE) IN CASH HELD 183.0 (41.9) n/a DEBT, GEARING AND CAPITALISATION OF NON-CANCELLABLE OPERATING LEASES ON BALANCE SHEET DEBT Current debt 495.3 193.1 156.5 Non-current debt 2,577.7 2,591.7 (0.5) Swap offset (861.1) (740.0) 16.4 Cash and cash equivalents (1,429.1) (1,307.4) 9.3

NET DEBT 782.8 737.4 6.2 OFF BALANCE SHEET DEBT Present value of aircraft operating leases 1,351.9 1,489.4 (9.2) Net debt including off balance sheet debt 2,134.7 2,226.8 (4.1) Revenue hedge receivables (272.2) (370.0) (26.4)

NET DEBT INCLUDING OFF BALANCE SHEET DEBT AND REVENUE HEDGE RECEIVABLES 1,862.5 1,856.8 0.3 BALANCE SHEET INCLUDING OFF BALANCE SHEET DEBT Total assets 12,247.9 11,571.3 5.8 Total liabilities 9,339.5 8,763.3 6.6

TOTAL SHAREHOLDERS’ EQUITY INCLUDING OFF BALANCE SHEET DEBT 2,908.4 2,808.0 3.6 Net debt to net debt plus equity (ratio) 20:80 20:80 n/a Net debt to net debt plus equity including off balance sheet debt (ratio) 42:58 44:56 n/a Net debt to net debt plus equity including off balance sheet debt and revenue hedge receivables (ratio) 39:61 40:60 n/a * Excludes proceeds on sale (and on sale and leaseback) of non-current assets and interest revenue which is included in net interest expense.

28 QANTAS 1999 ANNUAL REPORT

Brought to you by Global Reports CONTENTS PAGE Directors’ Report 30 Concise Financial Report Profit and Loss Statement 34 Discussion and Analysis of the Profit and Loss Statement 35 Balance Sheet 36 Discussion and Analysis of the Balance Sheet 37 Statement of Cash Flows 38 Discussion and Analysis of the Statement of Cash Flows 39 Notes to the Financial Statements 40 1. Basis of Preparation of the Concise Financial Report 40 2. Revenue 40 3. Abnormal Items 40 4. Dividends 40 5. Earnings per Share 41 6. Segment Information 41 7. Share Capital 42 8. Contingent Liabilities 42 9. Events Subsequent to Balance Date 43 Directors’ Declaration 44 Independent Audit Report on the Concise Financial Report 45

Information for shareholders this year is provided in this Annual Report and in a separate Financial Report.

This Report includes a Concise Financial Report which contains key financial information about Qantas in a concise format. The Financial Report provides more detailed financial information. The Concise Financial Report, whilst derived from the Financial Report, cannot be expected to provide as full an understanding of the financial performance, financial position and financing and investing activities of Qantas and its controlled entities as the Financial Report.

A copy of the Financial Report, including the Independent Audit Report, is available to all shareholders, free of charge, upon request. The Financial Report can be requested by telephone (toll free within Australia 1800 177 747, overseas 61 2 8234 5470).

1999 CONCISE REPORT

QANTAS 1999 ANNUAL REPORT 29

Brought to you by Global Reports DIRECTORS’ REPORT

FOR THE YEAR ENDED 30 JUNE 1999

The Directors of Qantas Airways Limited (Qantas) present their DIVIDENDS report together with the Concise Financial Report of the The Directors declared a final dividend of $296.6 million consolidated entity, being Qantas and its controlled entities (final ordinary dividend 11 cents per share and special (Qantas Group), for the financial year ended 30 June 1999 dividend 13.5 cents per share) for the year ended and the Audit Report thereon. 30 June 1999 (1998: final ordinary dividend 7 cents per DIRECTORS share). The final dividend will be fully franked and follows a fully franked interim dividend of $95.0 million (interim The Directors of Qantas at any time during or since the ordinary dividend 8 cents per share), which was paid during financial year are: the financial year. Gary Pemberton, AC (Chairman) REVIEW OF OPERATIONS AND STATE OF AFFAIRS James Strong Gary Toomey A review of the Qantas Group’s operations, including the Bob Ayling * results of those operations, and changes in the state of affairs Mike Codd, AC of the Qantas Group during the financial year is contained on John Ducker, AO pages 6 to 17. In the opinion of the Directors, there were no Trevor Eastwood, AM other significant changes in the state of affairs of the Qantas Margaret Jackson Group that occurred during the financial year under review Jim Kennedy, AO, CBE not otherwise disclosed in this Annual Report. Trevor Kennedy, AM EVENTS SUBSEQUENT TO BALANCE DATE Roger Maynard There has not arisen in the interval between the end of Nick Tait the financial year and the date of this report, any item, Derek Stevens (alternate for Bob Ayling) transaction or event of a material and unusual nature that, Details of Directors, their experience and any special in the opinion of the Directors, has significantly affected, responsibilities are set out on pages 22 to 24. or may significantly affect, the operations of the Qantas * Bob Ayling is the Chief Executive Officer of British Airways Plc. When it is not Group, the results of those operations, or the state of affairs possible for him to attend Qantas Board Meetings, he is represented by an alternate, who is either Derek Stevens or Roger Maynard. of the Qantas Group, in this financial year or in future financial years. PRINCIPAL ACTIVITIES The principal activities of the Qantas Group during the course LIKELY DEVELOPMENTS of the financial year were the operation of international and The Review of Operations on pages 6 to 17 includes domestic air transportation services, the sale of worldwide information on developments likely to affect the operations and domestic holiday tours and associated support activities of the Qantas Group. including information technology, catering, ground handling Further information about likely developments in the and engineering and maintenance. operations of the Qantas Group and the expected results During the year, the Qantas Group sold the remainder of of those operations in future financial years has not been its resort operations. There were no other significant changes included in this Directors’ Report because disclosure of in the nature of the activities of the Qantas Group during the the information would be likely to result in unreasonable financial year. prejudice to the Qantas Group.

DIRECTORS’ MEETINGS The number of Directors’ Meetings held (including Meetings of Committees of Directors) and number of Meetings attended by each of the Directors of Qantas during the financial year are as follows:

30 QANTAS 1999 ANNUAL REPORT

Brought to you by Global Reports Audit Safety, Environment Qantas Board Committee & Security Committee

Directors Attended Held * Attended Held * Attended Held *

Gary Pemberton 11 11 5 # 5 # James Strong 11 11 5 # 5 # 44 Gary Toomey 10 11 4 # 5 # Bob Ayling 4 + 11 Mike Codd 11 11 5 5 John Ducker 9 11 4 5 4 4 Trevor Eastwood 9 11 Margaret Jackson 11 11 5 5 Jim Kennedy 11 11 Trevor Kennedy 11 11 Roger Maynard 11 11 4 @ 5 Nick Tait 10 11 2 4 * Reflects the number of Meetings held during the time that the Director held office during the financial year. + When not present in person represented by an alternate, being Roger Maynard in this financial year. @ When not present in person represented by an alternate, being Nick Tait. # Attended in an ex-officio capacity.

DIRECTORS’ INTERESTS AND BENEFITS earlier of the expiry of the relevant senior executive’s service Particulars of Directors’ interests in the share capital of Qantas contract or 30 June 2002, based on the financial performance at the date of this report are as follows: of the Qantas Group. The annual level of incentive payment that vests at the end 1999 1998 Directors’ Ordinary Shares Number Number of each financial year up to and including 30 June 2002 is determined on a range of criteria including the Qantas Total Gary Pemberton 167,707 167,707 Shareholder Return (TSR) ranking amongst the top 100 listed James Strong 109,196 104,210 Australian companies and also against the TSRs of a Gary Toomey 26,698 25,276 predetermined basket of international airlines listed on Mike Codd 8,000 8,000 overseas stock exchanges. John Ducker 6,385 6,109 Executive Directors and other executives participate in Margaret Jackson 25,348 24,253 a performance-based reward scheme introduced for all Jim Kennedy 1,000 10,000 executives in the 1995/96 financial year. This scheme Trevor Kennedy 20,800 20,800 provides for cash performance bonuses to be paid where No Directors have interests in options over ordinary shares of predetermined objectives are met. Performance objectives Qantas at the date of this report. include the achievement of a predetermined level of profit and cost reduction/revenue improvement targets. DIRECTORS’ AND EXECUTIVE OFFICERS’ EMOLUMENTS Details of the nature and amount of each major element Directors’ and executives’ remuneration includes fees or of the emoluments of each Director of Qantas and each salaries (as appropriate), superannuation contributions, of the five named officers of Qantas and the Qantas Group performance bonuses, other benefits and retirement and receiving the highest emoluments are set out in the resignation payments. following table: Executive Directors and certain senior executives participate in an Executive Incentive Plan, introduced in the 1996/97 financial year, which provides for a bonus payable at the

QANTAS 1999 ANNUAL REPORT 31

Brought to you by Global Reports DIRECTORS’ REPORT

FOR THE YEAR ENDED 30 JUNE 1999

Super Non-cash Resignation Fees 1 Contribution Benefits 2 Benefits Total Non-Executive Directors $ $ $ $ $

Gary Pemberton 250,000 6,854 7,201 – 264,055 Bob Ayling 47,600 3,332 – – 50,932 Mike Codd 43,600 3,052 36,826 – 83,478 John Ducker 36,776 2,574 – – 39,350 Trevor Eastwood 47,600 3,332 16,767 – 67,699 Margaret Jackson 43,250 3,027 32,843 – 79,120 Jim Kennedy 47,600 3,332 5,373 – 56,305 Trevor Kennedy 47,600 3,332 15,928 – 66,860 Roger Maynard 48,589 3,401 4,906 – 56,896 Nick Tait 48,589 3,401 8,119 – 60,109 Derek Stevens (alternate for Bob Ayling) – – – – –

Fixed Annual Performance Non-cash Resignation Remuneration 3 Bonus Benefits 2 Benefits Total Executive Directors $ $ $ $ $

James Strong 1,223,000 654,900 37,622 – 1,915,522 Gary Toomey 732,813 375,000 12,141 – 1,119,954

Fixed Annual Performance Non-cash Resignation Executive Officers Remuneration 3 Bonus Benefits 2 Benefits Total (excluding Directors) $ $ $ $ $

QANTAS AND QANTAS GROUP Doug Gillies 406,000 – 86,602 688,890 1,181,492 Geoff Dixon 700,000 375,000 42,545 – 1,117,545 David Burden 472,500 236,250 71,195 – 779,945 Steve Mann 343,750 187,500 60,548 – 591,798 Paul Edwards 320,800 128,320 71,985 – 521,105

1 Fees comprise both Directors’ fees and Committee fees. Included in the amount of fees paid to Non-Executive Directors are adjustments arising from the full recovery of an overpayment of Committee fees which occurred as a result of an administrative error in previous financial years.

2 Non-cash benefits include car parking, travel and accommodation discounts obtained from time to time by Directors and executives, some of which are through agreements entered into by the Qantas Group. Certain travel benefits are available on similar terms and conditions as those offered to other senior executives and employees of the Qantas Group. The amount of non-cash benefits disclosed above has been determined on a cost to the company basis.

3 Fixed annual remuneration includes base salary, salary sacrifice motor vehicle and superannuation amounts. Executive Directors do not receive Directors’ fees.

In addition to the amounts noted above, $1,000 of Qantas shares were issued under the Qantas Staff Share Plan II to eligible employees (which excludes Non-Executive Directors). This equated to 275 shares at the prevailing issue price. These amounts have been excluded from the above disclosure as they involved no cost to Qantas.

No Directors or executives have interests in options over ordinary shares of Qantas at the date of this report.

32 QANTAS 1999 ANNUAL REPORT

Brought to you by Global Reports ENVIRONMENTAL REGULATIONS INDEMNITIES AND INSURANCE The Qantas Group’s operations are subject to a range Under Clause 12.1 of the Qantas Constitution, Qantas is of Commonwealth, State, Territory and international required to indemnify, to the extent permitted by law, each environmental legislation. The Qantas Group is committed officer of Qantas (subject to certain qualifications) against: to a high standard of environmental performance and the • liability to third parties (other than related Qantas Group Board places particular focus on the environmental aspects companies) arising out of conduct undertaken in his or her of its operations through the Safety, Environment & Security capacity as a Qantas officer, unless the liability arises out of Committee, which is responsible for monitoring compliance conduct involving a lack of good faith, wilful misconduct or with these regulations and reporting to the Board. reckless behaviour; and The Directors are satisfied that adequate systems are in • the costs and expenses of successfully defending legal place for the management of the Qantas Group’s proceedings arising out of conduct undertaken in his or environmental exposures and environmental performance. her capacity as a Qantas officer. The Directors are also satisfied that all relevant licences and permits are held and that appropriate monitoring procedures The Directors listed on page 30 and the secretaries of Qantas, are in place to ensure that those licences and permits are being Brett Johnson, Garie Hillier and Steve Heesh, have the complied with. Any significant environmental incidents are benefit of the indemnity in Clauses 12.1 to 12.4 of the reported to the Board. Qantas Constitution, which also applies to all executive officers of Qantas. Qantas has insured against amounts which The Directors are not aware of any breaches of any it may be liable to pay to officers pursuant to Clauses 12.1 to environmental legislation or of any significant environmental 12.4 of the Qantas Constitution or which it otherwise agrees incidents during the financial year which are material in nature. to pay by way of indemnity. DERIVATIVES AND OTHER FINANCIAL INSTRUMENTS During the financial year, Qantas paid a premium for The Qantas Group’s activities expose it to changes in interest Directors’ and Officers’ liability insurance policies, which rates, foreign exchange rates and fuel prices. It is also cover all Directors and officers of the Qantas Group. exposed to credit risks from its operations. The Qantas Group Details of the nature of the liabilities covered, and the amount manages these risk exposures using various financial of the premium paid in respect of the Directors’ and Officers’ instruments, based upon a set of policies approved by the insurance policies are not disclosed, as such disclosure is Board. Compliance with these policies is strictly monitored prohibited under the terms of the contracts. by management and reported to the Board. ROUNDING It is the Qantas Group’s policy not to enter, issue or hold derivative financial instruments solely for trading purposes. Qantas is a company of a kind referred to in ASIC Class Order 98/100 dated 10 July 1998 and in accordance with YEAR 2000 that Class Order, amounts in the Concise Financial Report, The Qantas Group’s progress in addressing the Year 2000 Financial Report and Directors’ Report have been rounded issue is contained on page 16 in the Review of Operations. off to the nearest one hundred thousand dollars unless otherwise indicated.

Signed pursuant to a Resolution of the Directors:

JAMES STRONG Chief Executive and Managing Director 15 September 1999

QANTAS 1999 ANNUAL REPORT 33

Brought to you by Global Reports PROFIT AND LOSS STATEMENT

FOR THE YEAR ENDED 30 JUNE 1999

QANTAS GROUP

1999 1998 Notes $m $m

SALES AND OPERATING REVENUE Net passenger revenue 6,437.5 6,188.3 Net freight revenue 553.4 547.8 Tour and travel sales 510.3 510.7 Other sources * 947.5 884.7

TOTAL SALES AND OPERATING REVENUE 2 8,448.7 8,131.5

EXPENDITURE Manpower and staff related 2,206.0 2,196.8 Selling and marketing 947.9 914.5 Aircraft operating – variable 1,679.4 1,551.8 Fuel and oil 761.6 888.5 Property 216.1 205.7 Computer and communication 346.1 272.7 Depreciation and amortisation 540.4 531.4 Non-cancellable operating lease rentals 107.8 138.8 Tour and travel cost of sales 439.0 412.7 Capacity hire, insurance and other 502.6 436.9

TOTAL EXPENDITURE 7,746.9 7,549.8

EARNINGS BEFORE INTEREST AND TAX (EBIT) 701.8 581.7 Net interest expense (100.1) (103.7)

OPERATING PROFIT BEFORE TAX AND ABNORMALS 601.7 478.0 Abnormal items 3 60.8 –

NET PROFIT BEFORE TAX 662.5 478.0 Income tax expense (241.6) (173.0)

NET PROFIT AFTER TAX 420.9 305.0 Outside equity interests in net loss/(profit) 0.7 (0.2)

NET PROFIT AFTER TAX ATTRIBUTABLE TO MEMBERS OF THE COMPANY 421.6 304.8 Retained profits at the beginning of the financial year 1,094.1 947.4

TOTAL AVAILABLE FOR APPROPRIATION 1,515.7 1,252.2 Dividends provided for or paid 4 (391.6) (158.1)

RETAINED PROFITS AT THE END OF THE FINANCIAL YEAR 1,124.1 1,094.1

* Excludes proceeds on sale (and on sale and leaseback) of non-current assets and interest revenue which is included in net interest expense. The Profit and Loss Statement should be read in conjunction with the Discussion and Analysis on page 35 and the notes to the financial statements on pages 40 to 43.

34 QANTAS 1999 ANNUAL REPORT

Brought to you by Global Reports DISCUSSION AND ANALYSIS OF THE PROFIT AND LOSS STATEMENT

FOR THE YEAR ENDED 30 JUNE 1999

REVIEW OF FINANCIAL PERFORMANCE • Increases in aircraft operating expenditure of 8.2 percent, • Operating profit before tax and abnormals of largely due to the maintenance cycle of aircraft and $601.7 million, up 25.9 percent on the prior year; engines, and increases in direct variable costs due to higher operating volumes; • Net profit after tax of $420.9 million, up 38.0 percent on last year; • Decreases in fuel and oil expenditure of 14.3 percent as a direct result of lower fuel prices, partially offset by • Abnormal gain before income tax of $60.8 million unfavourable exchange rate movements; representing profit on part sale of the investment in EQUANT NV; • Increases in computer and communication costs of 26.9 percent, due to continuing Year 2000 expenditures • Fully franked final ordinary dividend of 11 cents per share, and costs associated with the redesign of the Qantas 4 cents higher than the fully franked final dividend for telephone, computer, Internet and intranet networks; last year, bringing fully franked dividends for the year to 19 cents per share, 5.5 cents higher than last year; • Increases in depreciation and amortisation costs of 1.7 percent reflecting increased capital expenditure related • Fully franked special dividend of 13.5 cents per share; to aircraft acquisitions and refinancings, aircraft • Increase in earnings per share by 32.1 percent to reconfigurations and terminal and lounge improvements 35.4 cents; in Sydney, Melbourne, Brisbane and Perth;

• Shareholder return, as measured by share price appreciation • Non-cancellable operating lease rentals which decreased and dividends, for the year was 118.6 percent; by 22.3 percent due to the recent expiration of three aircraft operating leases; and • Return on shareholders’ equity improved by 3.5 percentage points to 13.8 percent; and • Capacity hire, insurance and other costs which increased by 15.0 percent reflecting expansion of codeshare activities. • Return on total gross assets improved by 0.5 percentage points to 14.2 percent. REVIEW OF OTHER PROFIT AND LOSS ITEMS

REVIEW OF SALES AND OPERATING REVENUE • Net interest expense decreased by 3.5 percent due to lower interest costs following debt repayments; and Sales and operating revenue increased by 3.9 percent to $8,448.7 million due to: • Income tax expense increased by 39.7 percent in line with increased profitability. • Increase in net passenger revenue of 4.0 percent to $6,437.5 million; and IMPACT OF EXCHANGE RATES ON THE PROFIT AND LOSS STATEMENT • Increase in other revenues of 7.1 percent to $947.5 million, largely due to expansion of Qantas Club and loyalty The Qantas Group is exposed to foreign exchange rate programs, co-branded credit cards and increased third party fluctuations on the Australian dollar value of foreign currency contract work. denominated revenues and expenditure. The Qantas Group earns revenue in approximately 80 different countries, REVIEW OF EXPENDITURE reflecting its route structure and where it sells tickets. Increases in expenditure were restricted to 2.6 percent, The Qantas Group’s foreign currency costs are primarily including: denominated in United States dollars and relate largely to fuel and engineering and maintenance materials. • Manpower and staff related costs which increased only maginally due to wage increases being offset by productivity The Qantas Group manages its foreign currency exposures by improvements; using a variety of long-term and short-term financial instruments, in accordance with its risk management policies. • Increases in selling and marketing expenditure of The overall impact of exchange rate movements on the profit 3.7 percent, in line with higher revenues; result in comparison to last year was not significant.

QANTAS 1999 ANNUAL REPORT 35

Brought to you by Global Reports BALANCE SHEET

AS AT 30 JUNE 1999

QANTAS GROUP

1999 1998 Notes $m $m

CURRENT ASSETS Cash 43.0 121.4 Receivables 1,855.3 1,579.8 Net receivables under hedge/swap contracts 157.5 143.2 Inventories 240.3 207.5 Other 88.1 56.8

TOTAL CURRENT ASSETS 2,384.2 2,108.7

NON-CURRENT ASSETS Receivables 590.8 652.5 Net receivables under hedge/swap contracts 1,478.9 1,565.6 Investments 35.2 38.6 Property, plant and equipment 6,653.0 5,913.4 Intangibles 26.7 28.6 Other 57.8 51.4

TOTAL NON-CURRENT ASSETS 8,842.4 8,250.1

TOTAL ASSETS 11,226.6 10,358.8

CURRENT LIABILITIES Accounts payable 1,521.2 1,384.2 Borrowings 496.6 193.9 Net payables under hedge/swap contracts 190.2 214.8 Provisions 820.0 559.1 Revenue received in advance 1,012.5 804.8 Deferred lease benefits/income 38.9 51.1

TOTAL CURRENT LIABILITIES 4,079.4 3,207.9

NON-CURRENT LIABILITIES Borrowings 2,577.7 2,591.6 Net payables under hedge/swap contracts 312.9 384.0 Provisions 752.8 805.4 Deferred lease benefits/income 410.9 377.6 Other 33.0 29.9

TOTAL NON-CURRENT LIABILITIES 4,087.3 4,188.5

TOTAL LIABILITIES 8,166.7 7,396.4

NET ASSETS 3,059.9 2,962.4

SHAREHOLDERS’ EQUITY Share capital 7 1,882.0 1,177.3 Reserves 52.8 689.0 Retained profits 1,124.1 1,094.1 Shareholders’ equity attributable to members of the Company 3,058.9 2,960.4 Outside equity interests in controlled entities 1.0 2.0

TOTAL SHAREHOLDERS’ EQUITY 3,059.9 2,962.4

The Balance Sheet should be read in conjunction with the Discussion and Analysis on page 37 and the notes to the financial statements on pages 40 to 43.

36 QANTAS 1999 ANNUAL REPORT

Brought to you by Global Reports DISCUSSION AND ANALYSIS OF THE BALANCE SHEET

AS AT 30 JUNE 1999

The net assets of the Qantas Group increased by 3.3 percent • Revenue received in advance reflects passenger and freight to $3,059.9 million during the past financial year. Major items forward sales which are taken to revenue when the tickets are discussed below. are utilised or the freight uplifted. This balance increased by 25.8 percent due to a higher level of forward sales REVIEW OF ASSETS compared to last year. • Current receivables increased by 17.4 percent, largely as a result of the investment of the US$350 million note REVIEW OF SHAREHOLDERS’ EQUITY proceeds, received in June 1999, in short-term money • Share capital increased by 59.9 percent due to the market securities at balance date. In addition, trade debtors transfer of the share premium reserve of $636.3 million increased in line with increased revenue; on 1 July 1998, following changes to the Corporations Law which abolished the par value of shares; • Net receivables/payables under hedge/swap contracts increased by 2.1 percent to $1,133.3 million. This • In addition, a total of 20.8 million new shares were issued represents: during the year under the Dividend Reinvestment Plan; and

– cross-currency swaps used to hedge long-term foreign • Reserves decreased by 92.3 percent again reflecting the currency borrowings; transfer of the share premium reserve to share capital.

– deferred gains/losses on forward foreign exchange GEARING contracts used to hedge capital expenditure; and Qantas Group gearing, including off balance sheet debt, – net deferred losses associated with hedges of foreign on a hedged basis at 30 June 1999 improved by one currency revenues relating to future transportation percentage point to 39:61. Gearing is determined by dividing services designated to service long-term debt; the book value of the Qantas Group’s net debt (short and long-term debt plus the present value of non-cancellable • Inventory levels increased by 15.8 percent due to higher operating leases less related hedge receivables and cash and expenditure on engineering expendables and consumable cash equivalents) by the same amount plus the book value of stores; and shareholders’ equity. • Property, plant and equipment increased by 12.5 percent, reflecting capital expenditure on aircraft acquisitions and refinancings, aircraft reconfigurations and terminal and lounge improvements in Sydney, Melbourne, Brisbane and Perth.

REVIEW OF LIABILITIES • Accounts payable increased by 9.9 percent in line with increased activity;

• Total borrowings increased by 10.4 percent due to the US$350 million note issue in June 1999, partially offset by debt repayments made during the year;

• Provisions increased by 15.3 percent as a result of higher dividends, higher tax payable due to increased profitability and increases in employee entitlement provisions, reflecting wage increases; and

QANTAS 1999 ANNUAL REPORT 37

Brought to you by Global Reports STATEMENT OF CASH FLOWS

FOR THE YEAR ENDED 30 JUNE 1999

QANTAS GROUP

1999 1998 $m $m

CASH FLOWS FROM OPERATING ACTIVITIES Receipts from customers 8,693.5 8,194.3 Payments to suppliers and employees (7,129.4) (6,773.6) Interest received 80.4 96.5 Interest paid (168.9) (187.6) Dividends received 17.9 17.8 Income taxes paid (285.2) (129.0)

NET CASH PROVIDED BY OPERATING ACTIVITIES 1,208.3 1,218.4

CASH FLOWS FROM INVESTING ACTIVITIES Payments for property, plant and equipment (1,233.3) (673.0) Payments for aircraft security deposits (11.4) (13.6)

Total payments for purchases of property, plant, equipment and aircraft security deposits (1,244.7) (686.6) Proceeds from sale of property, plant and equipment 88.5 40.6 Proceeds from sale and leaseback of property, plant and equipment 467.0 – Proceeds from sale of investment 60.9 – Payments for investments, net of cash acquired (0.6) (22.0)

NET CASH USED IN INVESTING ACTIVITIES (628.9) (668.0)

CASH FLOW FROM FINANCING ACTIVITIES Repayment of borrowings/swaps (345.7) (571.5) Debt prepayments on sale and leaseback of property, plant and equipment (467.0) (76.5)

Total debt repayments (812.7) (648.0) Proceeds from borrowings/swaps 526.0 55.7 Proceeds from issue of shares – 36.7 Dividends paid (109.7) (36.7)

NET CASH USED IN FINANCING ACTIVITIES (396.4) (592.3)

RECONCILIATION OF CASH PROVIDED BY/(USED IN) Operating activities 1,208.3 1,218.4 Investing activities (628.9) (668.0) Financing activities (396.4) (592.3)

Net increase/(decrease) in cash held 183.0 (41.9) Cash at the beginning of the financial year 710.7 752.6

CASH AT THE END OF THE FINANCIAL YEAR 893.7 710.7

The Statement of Cash Flows is to be read in conjunction with the Discussion and Analysis on page 39 and the notes to the financial statements on pages 40 to 43.

38 QANTAS 1999 ANNUAL REPORT

Brought to you by Global Reports DISCUSSION AND ANALYSIS OF THE STATEMENT OF CASH FLOWS

FOR THE YEAR ENDED 30 JUNE 1999

For the purposes of the Statement of Cash Flows, REVIEW OF CASH FLOWS FROM FINANCING ACTIVITIES cash includes cash at bank and on hand, bank overdrafts, Cash flows used in financing activities decreased by cash at call, short-term money market securities $195.9 million largely as a result of: and term deposits. • Lower repayments of borrowings and swaps by REVIEW OF CASH FLOWS FROM OPERATING ACTIVITIES $225.8 million as debt matures; Cash flows provided by operating activities remained • Increases in prepayments of $390.5 million relating consistent with the prior year, at $1,208.3 million, to aircraft sale and leaseback transactions; primarily due to: • US$350 million note issue proceeds, received in June 1999; • Increase in receipts from customers and payments and to suppliers and employees in line with higher revenue and activity increases; and • Increase in cash dividends.

• Increase in income taxes paid due to higher levels of profitability and increases in instalment payments.

REVIEW OF CASH FLOWS FROM INVESTING ACTIVITIES Cash flows used in investing activities decreased by 5.9 percent, or $39.1 million. This decrease is largely due to:

• Increase of $47.9 million in proceeds from sale of aircraft and other assets;

• Increase in proceeds from aircraft sale and leaseback transactions of $467.0 million which were used to acquit the associated refinanced liability;

• Proceeds of $60.9 million on the abnormal gain on sale of part of the investment in EQUANT NV during the year, offset by:

• Increase in capital expenditure payments of $560.3 million relating to aircraft acquisitions and refinancings, aircraft reconfigurations and terminal and lounge improvements in Sydney, Melbourne, Brisbane and Perth.

QANTAS 1999 ANNUAL REPORT 39

Brought to you by Global Reports NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 1999

1. BASIS OF PREPARATION OF THE CONCISE FINANCIAL REPORT The Concise Financial Report has been prepared in accordance with the Corporations Law, Accounting Standard AASB 1039 Concise Financial Reports and applicable Urgent Issues Group Consensus Views. The Concise Financial Statements and specific disclosures have been derived from the Qantas Group’s Financial Report for the financial year. The Concise Financial Report does not, and cannot be expected to, provide as full an understanding of the financial performance, financial position and financing and investing activities of the Qantas Group as the Financial Report. This report has been prepared on the basis of historical costs and except where stated, does not take into account changing money values or current valuations of non-current assets. QANTAS GROUP 1999 1998 $m $m

2. REVENUE Sales revenue 8,430.8 8,113.7 Dividend revenue 17.9 17.8

TOTAL SALES AND OPERATING REVENUE 8,448.7 8,131.5 Interest revenue 73.6 100.0 Proceeds from sale of property, plant and equipment 88.5 40.5 Proceeds from sale of investment (abnormal item) 60.9 – Proceeds from sale and leaseback transactions 467.0 –

TOTAL REVENUE 9,138.7 8,272.0

3. ABNORMAL ITEMS The following abnormal item has been credited to operating profit during the current financial year: Profit on sale of investment 60.8 – Income tax effect (21.9) –

TOTAL ABNORMAL ITEMS AFTER INCOME TAX 38.9 –

4. DIVIDENDS Dividends proposed or paid by Qantas are: Franked Tax Percentage Cents Total Amount Rate Franked Type per Share $m Date of Payment %%

1999 Interim ordinary 8.0 95.0 31 March 1999 36 100 1999 Final ordinary 11.0 133.2 1 December 1999 36 100 1999 Special 13.5 163.4 1 December 1999 36 100 32.5 391.6 1998 Interim ordinary 6.5 74.9 1 April 1998 36 100 1998 Final ordinary 7.0 83.2 2 December 1998 36 100 13.5 158.1 QANTAS GROUP

1999 1998 $m $m

Amount of retained profits and reserves which could be distributed as franked dividends out of existing franking credits or out of franking credits arising from the payment of income tax in the forthcoming year – franked at 36 percent 427.0 217.3

The above amount represents the balance of the franking accounts as at 30 June 1999, taking into account adjustments for: (a) franking credits that will arise from the payment of income tax payable for the current financial year; (b) franking debits that will arise from the payment of the final dividends for the current financial year; and (c) franking credits that may be prevented from being distributed in subsequent years.

40 QANTAS 1999 ANNUAL REPORT

Brought to you by Global Reports QANTAS GROUP

1999 1998 cents cents

5. EARNINGS PER SHARE Earnings per share based on net profit after tax attributable to members of the Company 35.4 26.8

There is no material difference between basic and diluted earnings per share for the above years. The calculation of earnings per share is based upon the weighted average number of ordinary shares outstanding during the year. Number Number m m

Weighted average number of ordinary shares used in the calculation of earnings per share 1,189.7 1,138.6

6. SEGMENT INFORMATION Industry segments

The Qantas Group operates predominantly in one industry segment, being the transportation of passengers and freight on services within and to or from Australia.

Geographical segments

Passenger, freight and services revenue from domestic operations within Australia is attributed to the Australian area. Passenger, freight and services revenue from inbound and outbound services between Australia and overseas is allocated proportionately to the area where the sale was made. Other operating revenue is not allocated to a geographic area as it is impractical to do so.

1999 1998 Analysis of total revenue by geographic region $m $m

Passenger, freight and services revenue Australia 4,221.8 4,129.8 United Kingdom and Europe 816.1 742.0 Japan 561.2 593.5 South East Asia/North East Asia 649.6 701.2 America and the Pacific 688.5 555.2 Other regions 351.8 359.9

7,289.0 7,081.6 Other operating revenue Tours and travel 510.3 510.7 Miscellaneous revenue 649.4 539.2

TOTAL SALES AND OPERATING REVENUE 8,448.7 8,131.5

Other revenue Interest revenue 73.6 100.0 Proceeds from sale of property, plant and equipment 88.5 40.5 Proceeds from sale of investment (abnormal item) 60.9 – Proceeds from sale and leaseback transactions 467.0 –

Total other revenue 690.0 140.5

TOTAL REVENUE 9,138.7 8,272.0

QANTAS 1999 ANNUAL REPORT 41

Brought to you by Global Reports NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 1999

6. SEGMENT INFORMATION (continued) Segmental analysis of net assets and profit contribution

For the financial year ended 30 June 1999, the principal assets of the Qantas Group comprised the aircraft fleet, all, except two, of which were registered and domiciled in Australia. These assets are used flexibly across the Qantas Group’s worldwide route network. Accordingly, there is no suitable basis for allocating such assets and the related liabilities between geographic areas.

Operating profit resulting from turnover generated in each geographic area according to origin of sale is not disclosed as it is neither practical nor meaningful to allocate the Qantas Group’s operating expenditure on that basis.

Disclosure is made of a more appropriate measure of profit contributions in accordance with the Qantas Group’s internal reporting system, being the earnings before interest and tax contributed by the international and domestic airline operations and subsidiary operations.

QANTAS GROUP

1999 1998 $m $m

Earnings before interest and tax International airline operations 308.3 271.9 Domestic airline operations 256.8 213.4 Subsidiary operations 136.7 96.4

701.8 581.7

Intersegment pricing is determined on an arm’s length basis.

7. SHARE CAPITAL Issued and paid up capital 1,205,392,530 (1998: 1,177,332,232) ordinary shares, fully paid 1,882.0 1,177.3

Abolition of par value Amendments to the Corporations Law, which came into effect on 1 July 1998, abolished the concept of par value shares. As a result, the amount of $636.3 million in the share premium reserve was transferred to the Qantas share capital account on 1 July 1998.

8. CONTINGENT LIABILITIES Related parties Guarantees to support borrowings and finance lease commitments to other parties on behalf of controlled entities 7.1 32.3 Guarantees and letters of comfort to support operating lease commitments and other arrangements entered into with other parties by controlled entities 164.7 97.2 Guarantees and letters of comfort to support leveraged and operating lease commitments to other parties on behalf of associated companies 3.9 3.9

175.7 133.4

Other parties General guarantees in the normal course of business 108.6 40.3 Contingent liabilities relating to current and threatened litigation 10.0 15.9

118.6 56.2

294.3 189.6

42 QANTAS 1999 ANNUAL REPORT

Brought to you by Global Reports 8. CONTINGENT LIABILITIES (continued) Terminal fuel facilities The Qantas Group, together with other airlines, has entered into various agreements in order to facilitate the funding and installation of jet turbine fuel hydrant systems and terminal equipment facilities at Los Angeles and Hawaii airports. The airlines have jointly and severally agreed to repay any unpaid balance (including interest) of the loans totalling $261.8 million (1998: $286.7 million) in the event the agreements are terminated prior to expiry of the loans.

Aircraft financing As part of the financing arrangements for the acquisition of aircraft, the Qantas Group has provided certain guarantees and indemnities to various lenders and equity participants in leveraged lease transactions. Only in exceptional circumstances, including the insolvency of major international banks, will the Qantas Group be required to make any payments under these guarantees. The Qantas Group has guaranteed that the lessors will receive all of the funds due to them under the lease arrangements.

Qantas and certain controlled entities have entered into asset value underwriting arrangements with lenders under certain aircraft secured financings. These arrangements protect the value of the aircraft security to the lenders to a predetermined level. This is reflected by the balance of aircraft security deposits held with certain financial institutions and included in current and non-current receivables totalling $531.1 million (1998: $529.4 million).

The Qantas Group has provided standard tax indemnities to the equity investors in certain leveraged leases. The indemnities effectively guarantee the after tax rate of return of the investors and the Qantas Group may be subject to additional financing costs on future lease payments if certain assumptions made at the time of entering the transactions, including assumptions as to the rate of income tax, subsequently become invalid.

Unrealised losses – back to back hedges Where long-term foreign currency borrowings have been denominated in surplus revenue currencies, offsetting forward foreign exchange contracts have been used to hedge the cash flows arising under the borrowings with the expected revenue surpluses used to hedge the borrowings. To the extent a gain or loss is incurred, this is deferred until the net revenue is realised. As at 30 June 1999, total unrealised exchange losses on hedges of net revenue designated to service long-term debt were $272.2 million compared to $370.0 million as at 30 June 1998.

9. EVENTS SUBSEQUENT TO BALANCE DATE There has not arisen in the interval between the end of the financial year and the date of this report, any item, transaction or event of a material and unusual nature that, in the opinion of the Directors, has significantly affected, or may significantly affect, the operations of the Qantas Group, the results of those operations, or the state of affairs of the Qantas Group, in this financial year or in future financial years.

QANTAS 1999 ANNUAL REPORT 43

Brought to you by Global Reports DIRECTORS’ DECLARATION

In the opinion of the Directors of Qantas Airways Limited, the accompanying Concise Financial Report of the consolidated entity, comprising Qantas Airways Limited and its controlled entities for the financial year ended 30 June 1999, set out on pages 34 to 43:

(a) has been derived from the Financial Report for the financial year; and

(b) complies with Accounting Standard AASB 1039 Concise Financial Reports.

Signed pursuant to a Resolution of the Directors:

JAMES STRONG Chief Executive and Managing Director 15 September 1999

44 QANTAS 1999 ANNUAL REPORT

Brought to you by Global Reports INDEPENDENT AUDIT REPORT ON THE CONCISE FINANCIAL REPORT

TO THE MEMBERS OF QANTAS AIRWAYS LIMITED

SCOPE AUDIT OPINION We have audited the Concise Financial Report of Qantas In our opinion, the Concise Financial Report of Qantas Airways Limited and its controlled entities for the financial Airways Limited and its controlled entities for the financial year ended 30 June 1999 as set out on pages 34 to 44 year ended 30 June 1999 complies with Accounting Standard in order to express an opinion on it to the members of the AASB 1039 Concise Financial Reports. Company. The Company’s Directors are responsible for the Concise Financial Report.

Our audit has been conducted in accordance with Australian Auditing Standards to provide reasonable assurance whether the Concise Financial Report is free of material KPMG misstatement. We have also performed an independent audit Chartered Accountants of the Financial Report of Qantas Airways Limited and its controlled entities for the financial year ended 30 June 1999. Our audit report on the Financial Report was signed on 15 September 1999 and was not subject to any qualification.

Our procedures in respect of the audit of the Concise DK JUKES Financial Report included testing that the information in the Concise Financial Report is consistent with the Financial Partner Report and examination, on a test basis, of evidence Sydney, 15 September 1999 supporting the amounts, Discussion and Analysis, and other disclosures which were not directly derived from the Financial Report. These procedures have been undertaken to form an opinion whether, in all material respects, the Concise Financial Report is presented fairly in accordance with Accounting Standard AASB 1039 Concise Financial Reports.

The audit opinion expressed in this report has been formed on the above basis.

QANTAS 1999 ANNUAL REPORT 45

Brought to you by Global Reports FIVE YEAR SUMMARY QANTAS GROUP FOR THE FIVE YEARS ENDED 30 JUNE

Unit 1999 1998 1997 1996 1995

PROFIT AND LOSS STATEMENT SALES AND OPERATING REVENUE * $m 8,448.7 8,131.5 7,834.4 7,600.4 7,162.9 Expenditure $m (7,746.9) (7,549.8) (7,317.2) (7,096.0) (6,691.5) EARNINGS BEFORE INTEREST AND TAX $m 701.8 581.7 517.2 504.4 471.4 Net interest expense $m (100.1) (103.7) (96.3) (103.0) (151.0) OPERATING PROFIT BEFORE TAX AND ABNORMALS $m 601.7 478.0 420.9 401.4 320.4 Abnormal items $m 60.8 – (17.2) – – NET PROFIT BEFORE TAX $m 662.5 478.0 403.7 401.4 320.4 Income tax expense $m (241.6) (173.0) (151.0) (154.7) (140.1) NET PROFIT AFTER TAX $m 420.9 305.0 252.7 246.7 180.3 Outside equity interests in net loss/(profit) $m 0.7 (0.2) – (0.5) (0.2) NET PROFIT FOR THE YEAR $m 421.6 304.8 252.7 246.2 180.1 Net profit for the six months to 31 December $m 222.9 165.8 151.6 148.1 128.5 Net profit for the six months to 30 June $m 198.7 139.0 101.1 98.1 51.6

SHARE INFORMATION Earnings per share cents 35.4 26.8 23.6 24.2 18.0 Dividends per share cents 32.5 13.5 13.0 13.0 3.5 Dividend payout ratio % 91.8 50.4 55.1 53.7 19.4 Share price – high $ 5.00 3.21 3.15 2.47 n/a Share price – low $ 2.27 2.13 1.79 2.03 n/a Share price – closing $ 4.99 2.43 3.10 2.15 n/a Weighted average number of ordinary shares m 1,189.7 1,138.6 1,069.6 1,017.9 1,000.0 Net tangible asset backing per share $ 2.52 2.49 2.38 2.35 2.27

EARNINGS BEFORE INTEREST AND TAX International airline operations $m 308.3 271.9 274.7 267.8 267.2 Domestic airline operations $m 256.8 213.4 168.3 163.6 132.7 Subsidiary operations $m 136.7 96.4 74.2 73.0 71.5

EARNINGS BEFORE INTEREST AND TAX $m 701.8 581.7 517.2 504.4 471.4 PROFIT AND LOSS PERFORMANCE INDICATORS Interest cover times 7.0 5.6 5.4 4.9 3.1 Return on shareholders’ equity (excl. operating leases) % 13.8 10.3 9.5 10.1 7.9 Return on shareholders’ equity (incl. operating leases) % 14.6 10.8 10.8 13.5 9.8

STATEMENT OF CASH FLOWS Net cash provided by operating activities $m 1,208.3 1,218.4 1,110.8 936.4 853.8 Net cash used in investing activities $m (628.9) (668.0) (71.1) (152.4) (221.3) Net cash used in financing activities $m (396.4) (592.3) (744.3) (721.0) (516.2)

NET INCREASE/(DECREASE) IN CASH HELD $m 183.0 (41.9) 295.4 63.0 116.3 Capital expenditure $m (1,233.3) (673.0) (610.6) (503.5) (451.0)

BALANCE SHEET Total assets $m 11,226.6 10,358.8 9,852.1 9,221.6 8,928.5 Total liabilities $m 8,166.7 7,396.4 7,181.1 6,785.0 6,650.6

NET ASSETS $m 3,059.9 2,962.4 2,671.0 2,436.6 2,277.9 Share capital $m 1,882.0 1,177.3 1,111.7 1,035.5 1,000.0 Reserves $m 52.8 689.0 609.9 574.4 564.2 Retained profits $m 1,124.1 1,094.1 947.4 824.9 712.4 Outside equity interests in controlled entities $m 1.0 2.0 2.0 1.8 1.3

TOTAL SHAREHOLDERS’ EQUITY $m 3,059.9 2,962.4 2,671.0 2,436.6 2,277.9 BALANCE SHEET STATISTICS Net debt on balance sheet $m 782.8 737.4 1,049.1 1,605.7 2,334.3 Net debt including off balance sheet debt $m 2,134.7 2,226.8 2,680.7 3,558.1 5,042.0 Net debt including off balance sheet debt and revenue hedge receivables $m 1,862.5 1,856.8 2,461.3 3,435.7 4,192.5 Net debt to net debt plus equity ratio 20:80 20:80 28:72 40:60 51:49 Net debt to net debt plus equity including off balance sheet debt ratio 42:58 44:56 51:49 62:38 72:28 Net debt to net debt plus equity including off balance sheet debt and revenue hedge receivables ratio 39:61 40:60 49:51 61:39 68:32

* Excludes proceeds on sale (and on sale and leaseback) of non-current assets and interest revenue which is included in net interest expense.

46 QANTAS 1999 ANNUAL REPORT

Brought to you by Global Reports Unit 1999 1998 1997 1996 1995

OPERATIONAL STATISTICS INTERNATIONAL – SCHEDULED SERVICES TRAFFIC AND CAPACITY Passengers carried 000 6,581 6,623 6,698 6,165 5,980 Revenue passenger kilometres (RPKs) m 45,178 44,511 45,266 41,432 39,563 Available seat kilometres (ASKs) m 62,679 63,034 63,169 58,862 56,289 Revenue seat factor % 72.1 70.6 71.7 70.4 70.3 Revenue freight tonne kilometres (RFTKs) m 1,783 1,829 1,759 1,685 1,688 Available freight tonne kilometres (AFTKs) m 2,942 3,085 2,872 2,664 2,551 DOMESTIC – SCHEDULED SERVICES TRAFFIC AND CAPACITY Passengers carried 000 10,111 9,738 9,622 9,386 8,442 Revenue passenger kilometres m 12,956 12,415 12,385 11,926 10,652 Available seat kilometres m 16,554 15,952 15,882 15,143 13,459 Revenue seat factor % 78.3 77.8 78.0 78.8 79.1 CORE AIRLINE PERFORMANCE STATISTICS TRAFFIC AND CAPACITY Passengers carried 000 16,692 16,361 16,320 15,551 14,422 Revenue passenger kilometres m 58,134 56,926 57,651 53,358 50,215 Available seat kilometres m 79,233 78,986 79,051 74,005 69,748 Revenue seat factor % 73.4 72.1 72.9 72.1 72.0 Average passenger journey length km 3,483 3,479 3,533 3,431 3,482 Revenue tonne kilometres (RTKs) m 7,129 7,055 7,052 6,603 6,350 Available tonne kilometres (ATKs) m 11,144 11,151 10,887 10,246 9,620 FINANCIAL Passenger yield (per RPK) cents 10.34 10.16 9.82 10.53 10.65 PRODUCTIVITY Average full-time employee strength # 23,411 23,749 24,620 24,429 23,238 RPKs per employee 000 2,483 2,397 2,342 2,184 2,161 ASKs per employee 000 3,384 3,326 3,211 3,029 3,001 Aircraft utilisation (average per day) hrs 11.6 11.7 12.1 11.8 11.1 QANTAS GROUP PERFORMANCE STATISTICS TRAFFIC AND CAPACITY Passengers carried 000 19,236 18,865 18,606 17,486 16,054 Revenue passenger kilometres m 59,863 58,619 59,199 54,627 51,204 Available seat kilometres m 81,765 81,537 81,440 75,930 71,225 Revenue seat factor % 73.2 71.9 72.7 71.9 71.9 Aircraft in service at balance date # 135 146 148 141 135 FINANCIAL Passenger yield (per RPK) cents 10.75 10.56 10.15 10.80 10.86 PRODUCTIVITY Average full-time equivalent employees # 28,226 28,934 30,080 29,627 28,565 RPKs per employee 000 2,121 2,026 1,968 1,844 1,793 ASKs per employee 000 2,897 2,818 2,707 2,563 2,493

GLOSSARY REVENUE PASSENGER KILOMETRES (RPKs) REVENUE SEAT FACTOR Number of paying passengers carried, multiplied by the Percentage of total passenger capacity actually utilised by number of kilometres flown. paying passengers. AVAILABLE SEAT KILOMETRES (ASKs) REVENUE TONNE KILOMETRES (RTKs) Total number of seats available for passengers, multiplied by Total tonnage of paid traffic carried, multiplied by the number the number of kilometres flown. of kilometres flown. REVENUE FREIGHT TONNE KILOMETRES (RFTKs) AVAILABLE TONNE KILOMETRES (ATKs) Number of tonnes of freight carried, multiplied by the Number of tonnes of capacity available for carriage of number of kilometres flown. passengers, freight and mail, multiplied by the number of kilometres flown. AVAILABLE FREIGHT TONNE KILOMETRES (AFTKs) Total freight tonnage capacity available, multiplied by the number of kilometres flown.

QANTAS 1999 ANNUAL REPORT 47

Brought to you by Global Reports SHAREHOLDER INFORMATION

The shareholder information set out below was applicable as at 8 September 1999.

DISTRIBUTION OF ORDINARY SHARES

Analysis of ordinary shareholders by size of shareholding:

ORDINARY NUMBER OF % OF NUMBER OF SHARES SHARES HELD SHAREHOLDERS ISSUED SHARES

1-1,000 * 9,949,730 20,655 0.83 1,001-5,000 127,345,139 80,398 10.56 5,001-10,000 27,935,549 4,378 2.32 10,001-100,000 35,728,595 1,910 2.96 100,001 and over 1,004,433,517 192 83.33

1,205,392,530 107,533 100.00

* 2,967 shareholders hold less than a marketable parcel of shares in Qantas Airways Limited.

TWENTY LARGEST SHAREHOLDERS

ORDINARY % OF SHAREHOLDER SHARES HELD ISSUED SHARES

British Airways Investments (Australia) Pty Limited 301,348,132 25.00 Chase Manhattan Nominees Limited 105,142,140 8.72 Westpac Custodian Nominees Limited 98,191,666 8.15 National Nominees Limited 81,795,317 6.79 BT Custodial Services Pty Limited 46,319,348 3.84 MLC Limited 39,063,162 3.24 Pendal Nominees Pty Limited 37,191,305 3.09 AMP Life Limited 27,235,744 2.26 ANZ Nominees Limited 21,034,672 1.75 Citicorp Nominees Pty Limited 20,825,693 1.73 Queensland Investment Corporation 16,752,262 1.39 Perpetual Trustees Victoria Limited 9,846,165 0.82 The National Mutual Life Association of Australasia Limited 9,035,240 0.75 Commonwealth Custodial Services Limited 8,239,191 0.68 Perpetual Trustees Nominees Limited 7,470,745 0.62 Zurich Australia Limited 6,710,124 0.56 Perpetual Nominees Limited 6,481,541 0.54 BT Custodians Limited 5,771,787 0.48 National Australia Financial Management Limited 5,509,305 0.46 AMP Nominees Pty Limited 5,379,500 0.45

859,343,039 71.32

SUBSTANTIAL SHAREHOLDERS

The following shareholders have notified that they are substantial shareholders of Qantas Airways Limited:

ORDINARY % OF SHAREHOLDER SHARES HELD ISSUED SHARES

British Airways Investments (Australia) Pty Limited 301,348,132 25.00 Principal Mutual Holding Company 95,202,477 7.90 Capital Group Companies, Inc 83,541,287 6.93 Zurich Investment Management Limited 59,511,928 5.05

48 QANTAS 1999 ANNUAL REPORT

Brought to you by Global Reports DIRECTORY

REGISTERED OFFICE STOCK EXCHANGE Qantas Airways Limited Australian Stock Exchange ACN 009 661 901 20 Bridge Street Qantas Centre Sydney NSW 2000 Level 9 Building A Australia 203 Coward Street DEPOSITARY FOR AMERICAN DEPOSITARY RECEIPTS Mascot NSW 2020 The Bank of New York Australia ADR Division Telephone 61 2 9691 3636 101 Barclay Street Facsimile 61 2 9691 3339 New York NY USA

Internet Address Telephone 1 212 815 2218 http://www.qantas.com.au Facsimile 1 212 571 3050

QANTAS SHARE REGISTRY FINANCIAL REPORT 60 Carrington Street Shareholders seeking a copy of the Financial Report, Sydney NSW 1115 which will be provided free of charge, should contact the Australia Qantas Share Registry.

Telephone 61 2 8234 5470 or 1800 177 747 Facsimile 61 2 8234 5050

GENERAL COUNSEL & COMPANY SECRETARY Brett Johnson

Designed and produced by Horniak & Canny

Brought to you by Global Reports Brought to you by Global Reports